Is a VAT the Answer to Our Deficit Problems?

The VAT can both placate and enrage folks on the left and on the right.

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Maybe this isn’t the best time to bring this up, with many of us just contemplating the damage on our tax returns, but there’s a new tax idea seeping its way into the public debate. It’s the Value Added Tax (VAT), the European staple that’s suddenly getting floated as a deficit panacea by politicians and economists up to and including the eminent Paul Volcker. This is a subject for one fine debate. Essentially a national sales tax, the VAT looks to be both efficient and addictive. It can variously placate and enrage folks on the left and the right. Sometimes simultaneously. I’d like to start a discussion on the merits and risks of the VAT. Give me your thoughts—or questions—at editor@usnews.com. And when we’re finished, maybe we can talk about the flat tax!

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