Pelosi: Hey, how about a VAT to help pay for ObamaCare?

posted at 4:58 pm on October 6, 2009 by Allahpundit

In case you were wondering how they’re going to make the program, ahem, “deficit-neutral,” wonder no longer.

“I would say, Put everything on the table and subject it to the scrutiny that it deserves,” Pelosi told Rose when asked if the VAT has any appeal to her…

Pelosi argued that the VAT would level the playing field between U.S. and foreign manufacturers, the latter of which do not have pension and healthcare costs included in the price of their goods because their governments provide those services, financed by similar taxes.

“They get a tax off of that and they use that money to pay the healthcare for their own workers,” Pelosi said, using the example of auto manufacturers. “So their cars coming into our country don’t have a healthcare component cost.

“Somewhere along the way, a value-added tax plays into this. Of course, we want to take down the healthcare cost, that’s one part of it,” the Speaker added. “But in the scheme of things, I think it’s fair look at a value- added tax as well.”

Ace already made the point I wanted to make. If you take her logic seriously, which is usually a bad idea, the only way to fully level the playing field and eliminate health-insurance costs from the price of U.S. goods is to … eliminate private health insurance. Anything short of that and you’re left with some health-care cost component, however small, built into the price of the good, with a VAT slapped on top to boot. Competitive pressure among companies to outprice each other will take care of the rest, leading them to drop private insurance coverage altogether and leave employees scrambling to enroll in the public option. In which case, there’s no need to legislate single-payer; ironically, the market will lead you there.

There’s another, simpler way to reduce the price disadvantage U.S. companies face, but that would require less government revenue, not more, and therefore is dead on arrival for Madam Speaker. Exit question: Is the VAT politically feasible? Rasmussen’s out with a new poll that finds 59 percent support for adding a provision to ObamaCare that would prohibit any new taxes, fees, or penalties on families who make less than $250,000 a year. The VAT, which operates basically as a sales tax, would drop like an atomic bomb on that sentiment. How will the Democrats sell it, especially with the GOP poised to make big gains next year? Does anyone seriously believe Pelosi’s going to gamble a narrow Democratic majority in the House on a new consumption tax?


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