In This VAT, There Be Billions

Scrambling to come up with money (i.e., take it from us taxpayers), Congress and the White House are experiencing a taxing time figuring out sources of revenue that won't have serious political repercussions. One that is almost sure to be enacted in the name of "healthcare reform" (since when did health care become one word?) is a tax on employer-provided health benefits, which will probably be skewed toward those with the highest wages and/or highest priced plans. Inevitably, however, the good ol' value-added tax, or VAT, has resurfaced. In this tax scheme, a tariff is assessed each time a value is added to a product--when it's made, when it's shipped and when it's bought or consumed. Some 130 nations currently employ VATs, and one wag even argues that a VAT of 24 percent (!) would enable the federal government to balance the budget and drop all income taxes to zero for those earning $100,000 or less and to 25 percent for high-earners. Of course, it would also horrifically raise the cost of everything from eggs to excess consumption--and everything in between. Now, if Congress would actually incorporate a VAT in the name of ending most income taxes, I'd say it's worth a look, but I doubt you could get many Democrats to go along in the face of a) "lost" revenue from income tax and b) constituent outrage over soaring living costs. Plus, Republicans, theoretically at least, are opposed to all taxes, especially those proposed by donkeys. (Not that the elephants have much power anymore.) The most commonsensical and best approach is, as always, an across-the-board flat tax on all incomes above..., well, fill in the blank. Or we could revisit Richard Nixon's plan for a guaranteed income for all and thus end the welfare debacle. However, things that make sense can never make it past Democrats, whose sole purpose in life is to create constituencies that will be indebted to them forever and therefore always vote Democratic--even if the world is falling apart around them. The Democrats, after all, have a program for everything--and a solution for nothing.