Geithner: Obama “Does Not Support” The VAT For US
Apr 22, 2010 7 Comments ›› Pat Dollard
President Barack Obama does not support implementing a value-added tax (VAT) in the United States, Treasury Secretary Tim Geithner said Thursday.
Geithner’s statement comes one day after Obama said that a VAT would be a “novel idea,” leaving the door open for it to be implemented.
“The president does not support [it], but we all recognize that our deficits are too high and we’ve got to bring them down,” Geithner said in an interview on MSNBC.
A executive director of the president’s fiscal commission has said that a VAT is one option the panel is considering and House Speaker Nancy Pelosi (D-Calif.) has said that the tax is “on the table.”
The secretary’s comments do not rule out the possibility of the tax being implemented, but they come as Obama’s remarks Wednesday renewed speculation that he is warming to the idea.
“You know, I know that there’s been a lot of talk around town lately about the value-added tax — that is something that has worked for some countries,” Obama said in an interview with CNBC. “It’s something that would be novel — for the United States.”
The VAT is a tax on manufacturers at each stage of production on value each firm adds to the product. Both parties in Congress have criticized the proposal — an overwhelming majority of senators voted last week to pass a non-binding resolution against it.
But some believe the tax is a good way to raise revenue to close large deficit gaps.
Geithner did say that Obama is going to lay out proposals that will be politically unpopular but that are designed to improve the country’s fiscal standing.
“The president has laid out a tough set of proposals — that are going to be politically difficult proposals — that are going to cut those deficits dramatically,” he said.
