Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax — called a value-added tax, or VAT — has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

At a White House conference earlier this year on the governments budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obamas policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

via The Washington Post.

Horah, more taxes! Here I was worried that 30+ % of my income going to government programs just didn’t feel like enough. Here is another few smart solutions to our fiscal problems

1. Stop paying & treating government workers like their jobs are sacrosanct. Fire people when they screw up.
2. Cut programs who soley exist to throw away money to a select few
3. Privatise expensive government pension and drug benefits

I mean these kinds of reforms work perfectly well in Chile. Are we not smart enough to make them work here?!

Prudent Chile Thrives Amid Downturn – WSJ.com

As the savings swelled above $20 billion — more than 15% of Chile’s economic output — Mr. Velasco faced growing pressure to break open the piggy bank. In September, protesters barged into a presentation by Mr. Velasco, carrying an effigy of him and shouting, “The copper money is for the poor people.”

The 48-year-old Mr. Velasco, wary that a flood of copper income could generate lending and consumption bubbles, stood his ground, even as the popularity of the center-left government withered. Latin American history, he cautioned, was full of “booms that had been mismanaged and ended badly.”

via Prudent Chile Thrives Amid Downturn – WSJ.com.

Great story about how the finance minister did the right thing and saved for a rainy day, saving his country from the fate of many developing countries in these hard times.