The Value-Added Tax Coming to America?

The Wall Street Journal reports:

So we are to have a European-style value-added tax (VAT). That's the emerging consensus in Washington as people come to recognize the reality of the deep financial hole into which the Obama administration has dug us.

The Congressional Budget Office reckons we will be Greece by the end of the decade, owing the world—mostly the Chinese—a sum equal to 90% of our gross domestic product. The rating agencies are warning that our AAA rating is at risk. The bond vigilantes are saddling up.

No surprise the administration's first step has been to soak the rich, using the health bill to increase taxes on capital gains, interest and dividends by high-income earners, to be followed by an increase in their marginal income tax rates to 39.6% from 35% (and their long-term capital gains rate to 20% from 15%) by year's end.

Every percentage point in tax would bring in $100 billion per year. European-level rates of 20% would net the U.S. Treasury $2 trillion, more than enough to cover the deficit—other things being equal, which they probably won't be, since higher, tax-inclusive prices will dampen spending and some products will be exempt.

An article well worth your time.