Fact or fiction? VAT tax helps pay for reform

Claim: A new value-added tax could efficiently help pay for expanding health insurance.

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To help pay for expanded insurance coverage, Democrats are considering new revenue sources, such as a value-added tax. Under a VAT, each stage of the production and distribution of a product is taxed, with consumers paying the cumulative cost of the taxes. The VAT is common in European nations. House Speaker Nancy Pelosi floated the idea of imposing a VAT to help pay for expanding insurance. "Somewhere along the way, a value-added tax plays into this," she said in an Oct. 5 interview. "We want to take down the health care cost…. But in the scheme of things, I think it’s fair look at a value-added tax as well."

For Subscribers

FOR SUBSCRIBERSAbdul El-Sayed tries to woo MAHA voters as Democrats seek inroads with RFK’s supporters

FOR SUBSCRIBERSKratom-like substances are popping up in a typically benign supplement

FOR SUBSCRIBERSGOP super PAC increases its spending for Sen. Jon Husted in tough Ohio race

FOR SUBSCRIBERSRecords reveal tumultuous marriage between slain New York Times executive and wife

FOR SUBSCRIBERSFrom clean energy warrior to ‘wall of shame,’ James Talarico reverses on a fossil fuel money pledge

FOR SUBSCRIBERSCongressional staff planned official trip with luxury stops in Italy and France weeks before election

FOR SUBSCRIBERSA harrowing ordeal aboard an Israel-bound plane

FOR SUBSCRIBERSOpenAI CEO Sam Altman to skip congressional hearing on rogue AI agents

FOR SUBSCRIBERSKey DOJ lawyers departed Trump ‘grand conspiracy’ probe amid pressure to produce, source says

FOR SUBSCRIBERSTrump’s new AI chatbot often links to a site launched under Clinton 26 years ago

FOR SUBSCRIBERSAt MAHA summit, industry CEOs the movement once vilified take the stage

FOR SUBSCRIBERSThis Paralympian has two goals: Win medals and give away $500,000 to her teammates

FOR SUBSCRIBERSCornell rape allegation spotlights stringent New York state laws that have long drawn criticism

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FOR SUBSCRIBERSDecades-old march dispute reignites in Northern Ireland, threatening political crisis

Fact or fiction?
Fact. What VAT has going for it: It is harder to evade than the income tax, is hidden in the cost of goods and services, and would be broad-based with virtually every consumer in the United States paying it. It would tax people earning less than $250,000, which President Barack Obama has pledged not to do, but low-income people could get rebates to help cushion the impact. "Economists agree that that is a way to raise revenues very efficiently," said Rudolph Penner, former director of the Congressional Budget Office. It has also won support from John Podesta, co-chairman of Obama’s transition team and White House chief of staff under Bill Clinton, and Paul Volcker, occasional advisor to Obama and former Federal Reserve chairman.

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