Volcker: Taxes likely to rise eventually to tame deficit

[easycougar]

Front page of Drudge...main headline


(Reuters) - The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker said on Tuesday.

Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax "was not as toxic an idea" as it has been in the past and also said a carbon or other energy-related tax may become necessary.

Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves. "If at the end of the day we need to raise taxes, we should raise taxes," he said.

[Zippyjuan]

Raising taxes is easier than trying to solve the underlying reasons for the problem and cutting outlays. Taxes will hit most people so certain groups don't necessarily feel that they are being singled out. But try to cut a single program and the uproar will be much greater since the group protesting directly (or indirectly) benefits from it. Try saying you will cut Social Security and you will be out in the next election. Raise taxes and you may take a hit but not as bad. Tax votes are often voice votes so that particiular representatives cannot be easily singled out for their vote. The real thing which needs to be dealt with is the growth of the entitlement programs (and that they are seen as "entitlements").