To pay for President Obama’s dream of insuring almost every single American (“costing at least $1 trillion. . . yet [leaving] tens of millions of people uninsured”), Congress is discussing a VAT, or value-added tax, common in Europe, that would be applied to the cost of goods. So, let’s say, 5 percent more on everything you buy. From The New York Times:
On Wednesday, leaders of the Senate Finance Committee hope to unveil what will be the one bipartisan measure in Congress.
Democrats on three House panels continue to meet privately to seek consensus on a single plan. Democrats on the House Ways and Means Committee said they were trying to decide whether to finance coverage of the uninsured with one broad-based tax, like the value-added tax, or a combination of smaller taxes.
The value-added tax, common in other countries, is collected in stages from each business that contributes to the production and sale of consumer goods. Economists say a 5 percent VAT could have raised $285 billion last year.
But a VAT could violate Mr. Obama’s campaign pledge not to raise taxes on households with incomes under $250,000 a year.
