Kuttner, Robert, “Another tax that hits the middle class,” Boston Globe, 06/30/10

(VATinfo Note: Kuttner does not advocate VAT, but implies acceptance if used for new middle-class benefits.)
“As the European experience shows, a VAT can indeed be an effective revenue raiser. But unless the proceeds go to support valued public services, it is just another tax on the middle class.

It is possible to make a VAT less regressive by using some of the new revenue to reduce income taxes or payroll taxes paid by working families. Some countries with VATs exempt necessities such as food. We can also offset its regressive nature by coupling it with new surtaxes on very high incomes.

So when the president’s fiscal commission raises the idea of a VAT, as is likely, we need to ask three questions:

- Are basic necessities like food and housing to be exempted?

- Is it part of a package that makes the tax system fairer and less onerous to the middle class overall?
- Do some of the proceeds go to finance public services that have been shortchanged for decades and that got further reduced in the current recession?

If not, the VAT should be considered dead on arrival. The last thing we need in a deep slump with persistent unemployment is higher taxes on the middle class.”