Obama Aides Neither Back Nor Bury Value-Added Tax

April 23, 2010 - 6:20 AM
Vice President Joe Biden on Thursday said no tax options have been ruled out.
Washington (AP) - Obama administration officials on Thursday further clouded the question of whether the president would consider a new value-added tax similar to those levied by some European countries.
 
President Barack Obama sounded somewhat open to the idea when it came up in an interview.
 
"I know that there's been a lot of talk around town lately about the value-added tax," he told CNBC on Wednesday. "That is something that has worked for some countries."
 
"Before, you know, I start saying 'this makes sense or that makes sense,' I want to get a better picture of what our options are," Obama said.
 
On Thursday his press secretary Robert Gibbs tossed cold water on the idea. "Just to be clear, no VAT tax," he told reporters traveling on Air Force One to hear the president give a speech in New York City on financial regulation.
 
But Vice President Joe Biden said no tax options have been ruled out.
 
Appearing Thursday on ABC's "The View," Biden was asked about "a national sales tax," a term often used for a value-added tax.
 
"We aren't talking about that," Biden said. "The president said he was open to listening about that."
 
Biden said Obama is awaiting recommendations from a bipartisan fiscal commission. "The president has said everything's on the table, everything's on the table, from cuts to even considering revenues," Biden said.
 
Treasury Secretary Timothy Geithner said on MSNBC's "Morning Joe" program: "The president does not support a VAT, but we all recognize that our deficits are too high."
 
Gibbs, asked about the day's statements, said in an e-mail: "What's inconsistent with what the three of us said? We all said 'no.'"
 
A VAT taxes the value that is added at each stage of production of certain commodities. Republican lawmakers overwhelmingly oppose it, and many Democrats are wary as well.
 
The Senate voted 85-13 last week for a nonbinding "sense of the Senate" resolution that says a VAX would be "a massive tax increase that will cripple families on fixed income and only further push back America's economic recovery."
 
Obama economic adviser Paul Volcker recently raised the prospect of a value-added tax. Ever since, Republicans have attacked the idea almost daily.
 
On Thursday, the Republican National Committee declared on its Web site: "Despite denials, Obama administration clearly considering value-added tax."