Volcker Muses About “New Tax” Options, Including a VAT

Breitbart.tv has posted an interview that White House economic recovery advisor Paul Volcker gave in London last week, where he muses about the U.S.'s fiscal situation.

Volcker notes that federal tax revenues have been about 18.5% of Gross Domestic Product (GDP) each year in recent history, and that the recent jump in spending to around 25% of GDP means that "you can't avoid thinking about taxes." He notes that the U.S. corporate income tax is the highest in the world, and argues that there's "no potential" in the income tax or payroll tax, leaving you "with a new tax." He lists a carbon tax, energy tax, or value-added tax as possible options.

Volcker's interview is a typical example of rhetorically setting up the inevitability of tax increases. Assuming that spending can't be cut, and assuming that entitlement programs can't be reformed, and assuming that income tax reform can't happen, therefore a VAT is inevitable.

Audio of his remarks in the video below.