Dems, GOP Resist Value-Added Tax

Many economists – and Forbes magazine publisher Steve Forbes – call for a value-added tax (VAT) to simplify our tax system and increase government revenue. But both Democrats and Republicans on Capitol Hill resist the idea, The Hill reports.

They worry about whether Americans will accept a tax on consumption. “It’s the worst of all worlds,” said Georgia GOP Rep. Tom Price, a member of the Ways and Means Committee. “The American people don’t want to be Western Europe,” which uses the VAT.

Republicans say the focus should be on spending cuts rather than tax increases. Indeed, some Republicans call the VAT a “money machine” that creates a path for bigger government.

Democrats worry about the VAT’s impact on the poor and middle class. “It’s always nice in the theoretical. It’s just not nice in its practical application,” said Rep. Richard Neal, D-Mass., the ranking member of the Ways and Means Subcommittee on Select Revenue Measures.