Here comes a VAT for health care?

Turning to domestic news for the moment (and as a distraction from my worries, frankly), I see via @mkhammer that a value-added tax is on the Democrats’ horizon, the better to pay for free health care*:

Unlike a sales tax that applies only to the point of purchase, a VAT taxes the value added at each stage of production. Thus, if the VAT rate is 5% and a producer of raw materials, a manufacturer and a retailer each add $1.00 of value to a product, then each owes the government five cents.

A source close to the Ways and Means Committee said House Democrats may be considering a VAT of 1% to 1.5%. That could raise $70 billion-$105 billion annually, based on calculations from a Con gressional Research Service report.


A VAT would be a major headache for President Obama, who has consistently pledged not to raise taxes on 95% of Americans. Republicans are sure to portray a VAT as a violation of his vow.

Well… yes. That would be because it is a violation of his vow.  It’s hardly the GOP’s fault if the President’s electoral strategy wrote checks that his governing methodology can’t cash… yes, yes, Top Gun put it better, but then Top Gun had the advantage of F-14 / MiG dogfights.  At any rate, there’s no earthly reason why we should avoid bringing up a broken promise just because nobody believed it anyway; if this administration wants to avoid facing the consequences of its rhetoric, it is perfectly welcome to take more care in the crafting of it.

Moe Lane

*There Ain’t No Such Thing As A Free Lunch. And that’s a book that I heartily recommend, by the way.

Crossposted to Moe Lane.