Further Information, Contact:
Rachael Slobodien or Pete Sepp, (703) 683-5700
(Alexandria, VA) – As President Obama's deficit reduction commission met again yesterday with a mandate that "everything has to be on the table," the 362,000-member National Taxpayers Union (NTU) announced it would mobilize its members to help sweep one of those options onto the floor: a revenue-raising value-added tax (VAT). The effort is designed to bolster last week's statement from more than 150 House lawmakers opposing a VAT.
"If the National Commission on Fiscal Responsibility and Reform is to ever live up to its name, then it should focus on getting government to spend less, not getting taxpayers to spend more," said NTU Executive Vice President Pete Sepp. "As experience in other countries has shown, a Value Added Tax is a vat in more ways than one – it serves as a huge pot of money that allows government to grow even faster beyond its means rather than maintaining a sustainable size."
NTU offered praise for the work of Rep. Joe Pitts (R-PA), who recently organized a letter signed by 154 members of the House Representatives that warned: "A new value-added tax is no way to revitalize an American economy that needs to create millions of new jobs." He also commended the Senate's 85-13 vote last month to reject imposition of a VAT in the U.S.
For more than 25 years, NTU has strongly fought against any attempts to implement a European-style value-added tax. Although this tax is applied directly to producers, businesses inevitably pass the costs of a VAT onto the consumers. In 1984, during landmark hearings on tax reform held at the U.S. Treasury, NTU testified that a VAT would be "the greatest threat to ever attaining a reasonable level of taxation in America." A year later, NTU helped found a coalition that stopped Congress from acting on a VAT plan originally hatched in the Senate Finance Committee to underwrite expansion of the "Superfund" toxic waste cleanup program.
Sepp suggested that instead of a VAT, the Commission should consider practical ideas for spending restraint, especially entitlement reform (Senator Simpson, the Commission's Co-Chair, wrote an introduction to the Chartbook on Entitlements and the Aging of America, published by NTU's research affiliate). He also urged the Commission to back constitutional amendments for a balanced budget and a line-item veto. "President Obama's proposal for greater budgetary rescission authority is a good start down the proper path to fiscal responsibility," Sepp concluded. "It's up to the Commission to take further steps that will help taxpayers rather than crush their future under the weight of a VAT."
NTU is a nonpartisan, nonprofit citizen organization founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels. Note: Further information about NTU's position and work against a VAT is available at www.ntu.org.