Obama’s Debt Commission Will Consider a Value-Added Tax
Bowles, a former chief of staff in the Clinton White House, told Fox News Sunday that “the president looked Senator Simpson and me in the eye and he said, ‘Everything is on the table.’ So we are going to look at every single way to right this fiscal ship,” Bowles said. That includes cutting “sacred cows” and raising revenue, he added.
“We have to have everything on the table,” including a value added tax, Bowles said.
“I think there are many good arguments that you can make for a value-added tax or consumption tax, as opposed to a tax on wages. But I think it's just one of the things that ought to be on the table that we ought to discuss. I'm not for taking anything off the table.”
Bowles refused to say if he personally thinks a VAT is a good idea. “I want to see the pros and cons discussed, and then I want to see us make some decisions and some hard recommendations.”
Simpson said before imposing a value-added tax, the nation needs to deal with the income tax. “You can’t have a VAT tax and then leave the present [income tax] structure,” he said.
Simpson said something has to be done: “We have the ability, and I hope the trust of each other, to adjust and put together a package. And if the American people and the Congress don't like it, then just let them sink, because Greece is sinking on debt and deficit; Spain is next; Portugal is next. How would you like to be the United States of America when China pulls the tin cup and says we don't want T-bills, we want money? Now, that's where we are. It's serious business.”
The commission is supposed to get its recommendations to President Obama by December 1, shortly after the midterm election.
According to Bowles, waiting until after the election is a good idea: “It gets the politics out of it and gives us a chance to build up some trust to get to some real hard recommendations,” he said.
The debt commission – formally named the National Commission on Fiscal Responsibility and Reform – will examine ways “to meaningfully improve” the nation’s long-term fiscal outlook, the executive order says.
The panel also will “examine changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal government over the long term.”