Indiana Gov. Mitch Daniels recently broke ranks with his fellow Republicans at a conservative event this month and spoke favorably about the introduction of a value-added tax (VAT). He said a "value-added tax" alongside a flat income tax "might suit our current situation pretty well." Republicans, in general, are anathema to the idea of any new taxes, especially a VAT, which has the disdainful quality of being invented and commonly implemented in Europe. Regardless, Daniels said new taxes might be needed to reduce the federal deficit.
Interestingly, Daniels isn't the only conservative to have recently opened up to the idea of a VAT. In his April 1 column, New York Times columnist David Brooks wrote:
Debt reduction has to be about renewal and prosperity, not pain and sacrifice. That means deficit reduction has to be embedded in policies that produce growth. Michael Graetz of Columbia University has proposed replacing the current awful tax code with a value-added tax of 14 percent, cuts in the corporate tax rate, and a fair income tax with two simple brackets kicking in over $100,000.
Brooks supported the VAT alongside a laundry list of other ways to get a grip on the deficit.