Fred Lucas writes in an Aug. 29 CNSNews.com article:
President Barack Obama’s nominee to chair the President’s Council of Economic Advisors has supported a European-style consumption tax that taxes every stage of production for a good or service, a policy generally called a Value Added Tax, or VAT.
Alan Krueger, a Princeton University economist, called for the Value Added Tax in a commentary for the New York Times in January 2009. The White House, however, has said that President Obama would not consider such a tax.
“Why not pass a 5 percent consumption tax to take effect two years from now? There are many different ways to implement a consumption tax, but for simplicity think about a national sales tax,” Krueger wrote in the Times piece published on Jan. 12, 2009, shortly before Obama took office.
The consumption tax differs from a “Fair Tax” proposal or national sales tax proposal that has been considered in recent years by U.S. politicians who want to replace the income tax. The VAT would be a levy that adds to the current tax structure.
In fact, as Media Matters details, Kruger didn’t express support for a VAT in that Times article; he specifically stated that “I pose it only as a suggestion for serious discussion; I’m not sure it is the best way to go.”
Lucas further messes up by stating that “The VAT would be a levy that adds to the current tax structure.” Actually, Krueger stated that over time, “income taxes or corporate taxes could be reduced and the revenue replaced by the consumption tax.”