The Executive Director of the White House panel charged with reducing the national debt told Fox Wednesday a value-added-tax or VAT would be among the options up for consideration.
“We need to talk through all sides of this equation,” Bruce Reed told Fox in an interview in his makeshift office two blocks from Capitol Hill. “We’re going to look at discretionary spending, mandatory spending, tax reform…look at this issue from every angle. And also look at ways and making sure that the economy is strong and it’s growing faster than debt is growing.”
When asked again about the raging debate in Washington think tanks over a VAT – a variation of a national sales tax that would hit the rich, middle class and poor – Reed said the 18-member commission could not afford to rule any idea.
“I don’t want to get ahead of the commission, they haven’t even had their first meeting.” Reed said. ” We intend to look at everything. But I don’t know which issues they’ll warm to and which ones they won’t. It’s important for everybody to come it recognizing the scale of the problem. If we’re facing a gap between what the government is taking in and what the government is shelling out of 5 or 6 percent of GDP (Gross Domestic Product) over the long haul, that’s not sustainable. That means the debt is growing twice as fast as the economy and you cant get away with that for long.”
Additionally, in an interview with CNBC, President Obama did not flatly rule out a VAT tax in the future, calling the levy a “novel” idea that had worked in other countries. Obama said he would prefer to focus first on reducing spending and said his strong preference is to sheild the middle class from tax increases.