Tags: barney | frank | vat | value | added | tax

Frank: 'Zero Chance' of Value-Added Tax Being Passed

Friday, 30 Jul 2010 08:15 AM

Rep. Barney Frank, D-Mass., says the chances of a value-added tax are "dead as a doornail."

The chairman of the House Financial Services Committee told CNBC that the VAT idea might have some appeal to companies seeking an export advantage, but that there's "zero chance of it going forward."

He said the tax, which imposes tariffs on different stages of production, may have had some appeal because of its effect on export levels, "it was very unpopular."

Top Democrats, including President Barack Obama, have suggested that the controversial tax could be an option in cutting high government debt.

Meanwhile, Frank also said that tax cuts enacted by President George W. Bush should be eliminated for people making $250,000 or more a year.

"The argument that raising the marginal rate somehow hurts economy activity has been tested," Frank told CNBC. "When Bill Clinton became president in 1993, I voted with his policy to take the marginal rate, the top parts of income, from 36 percent to 39 percent. It had zero negative impact."

Tax rates will automatically revert to pre-2001 levels, unless Congress changes the law by year's end. Bush proposed the tax reductions to pull the economy out of its slump at the time.

Treasury Secretary Timothy Geithner has said wealthy Americans should pay higher taxes to help clear the country's record debts. He told it was now "responsible" to allow the Bush tax cuts to die. Doing so would lead to a wide range of taxes on income, capital gains and inheritance increasing for Americans earning more than $250,000.

Obama, in a recent weekly radio address, blamed the tax cuts introduced by Bush in 2001 and 2003 for helping to push America into economic difficulties.

Former GOP presidential candidate and U.S. Senator Fred Thompson and Newt Gingrich are among many calling for an extension of the Bush tax cuts.

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Rep. Barney Frank, D-Mass., says the chances of a value-added tax are dead as a doornail. The chairman of the House Financial Services Committee told CNBC that the VAT idea might have some appeal to companies seeking an export advantage, but that there's zero chance of...
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2010-15-30
Friday, 30 Jul 2010 08:15 AM
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