A Big VAT Of Trouble

If Obama's serious about a national Value Added Tax to close the deficit, then somebody needs to quickly disabuse him of the notion.

President Barack Obama suggested Wednesday that a new value-added tax on Americans is still on the table, seeming to show more openness to the idea than his aides have expressed in recent days.

Before deciding what revenue options are best for dealing with the deficit and the economy, Obama said in an interview with CNBC, "I want to get a better picture of what our options are."

After Obama adviser Paul Volcker recently raised the prospect of a value-added tax, or VAT, the Senate voted 85-13 last week for a nonbinding "sense of the Senate" resolution that calls the such a tax "a massive tax increase that will cripple families on fixed income and only further push back America's economic recovery."

For days, White House spokesmen have said the president has not proposed and is not considering a VAT.

"I think I directly answered this the other day by saying that it wasn't something that the president had under consideration," White House press secretary Robert Gibbs told reporters shortly before Obama spoke with CNBC.

After the interview, White House deputy communications director Jen Psaki said nothing has changed and the White House is "not considering" a VAT.

For once, the Senate's actually right.  A VAT tax right now really would smash any hope of a recovery on the consumer end, not to mention make pretty much everything your average American buys cost more, from food to clothes to other necessities.  Yeah, I understand the need to raise some taxes and end some spending, but taxing milk, bread, socks and pencils isn't the way to do it.  but the reality is this is a consumer driven economy, and a VAT will lower consumption even more.  This is about as regressive as it gets, tax-wise.  it's going to really, really hurt anyone on a fixed budget, which these days is, oh, tens of millions of Americans.

Also, there is that little matter of it being total and complete political suicide for the Dems.  If this is another one of Obama's famous trial balloons, it just turned into a metric ton of lead and landed on his own foot.  The White House is denying the bejeezus out of this and rightfully so.

However, VAT-mania is just the kind of distraction the Republicans are looking for to take the heat off their own desire to block financial reform, and Obama's practically handing them the ammunition to take shots at him in the press.  Obama just hit the start button on the TAXEN CUTTEN UBER ALLES machine, and that's all the GOP will be talking about until Obama regains control of the narrative and the Village stops chasing the shiny VAT ball.

The hell is Obama thinking by saying that?