Those who don't pay any income taxes (see above) may soon get a splash of cold water in the face.
White House economic adviser and former Federal Reserve inflation czar Paul Volcker said Tuesday the United States should consider raising taxes to help bring deficits under control, and that we may need to consider a European-style value-added tax.
Mr. Volcker said the value-added tax "was not as toxic an idea" as it has been in the past.
Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the budget deficit under control may require such moves. "If at the end of the day we need to raise taxes, we should raise taxes," he said.
This is what's called a "trial balloon."
A value-added tax is an alternative to a national sales tax -- actually, it's worse, because it's added to each step of the processing of a consumer good, meaning it can end up being a 55 percent tax, or more -- that has been implemented by European countries including France to fund their massive social welfare spending. In France the VAT generates 49 percent of tax revenue.
That means if the United States had a VAT, Americans could expect to be paying twice as much in taxes as they do now, whether or not -- this is the great part -- they still had jobs. For the "lower half" of American earners, who currently pay no income tax, a VAT could mean a large -- and far more regressive -- tax boost.
President Obama is sending out his minions to see how loudly people squawk when he talks about a massive new federal tax -- in complete defiance of his campaign promise that no one earning under $250,000 per year would pay another penny under his "soak-the-rich" regime.
It's unlikely Mr. Obama can win re-election if he saddles this once-prosperous nation with such a monstrosity -- leading some to speculate this is a "stalking horse," a plan so purposely unpopular that some "lesser" evil can later be substituted, leading everyone to breathe a great sigh of relief that "at least we dodged the VAT."
It would be interesting to know Plan B.