There are many reasons why Republicans cannot talk about new taxes, even in the name of debt reduction. One is their tea party base, which will (rhetorically) tear limb from limb any politician who dares discuss increasing government revenues by raising the tax rate on anyone by even a smidge. Another, apparently, is because some revenue-neutral tax ideas to spur growth in the economy just sound too much like something a European might do.
Eric Cantor, incoming House Majority Leader, outlined this latter objection to a new in the Wall Street Journal yesterday. Asked about a proposal to fix the nation’s federal deficit co-authored by a Democratic budget expert and noted non-European retired Sen. Pete Domenici (R), which would actually lower taxes on income and corporations, Cantor dismissed it because, basically, parts of it look to him like something a European might consider.The plan would replace some corporate and income taxes with a 6.5% sales tax “as well as an excise tax on sugar drinks like soda.” Proponents told the Journal the sales tax “was a good way to go rather than try to put more burden on an income tax,” a concept which doesn’t sound especially European on its face. In fact, it sounds a lot like the so-called “fair tax” national sales tax plan conservatives have been pitching for years.
Cantor sees it differently. The proposal sounds like a value added tax to him. And that’s, well, you know.
Cantor, according to the Journal, said lawmakers “wouldn’t support VAT-type tax because its ties to Europe might make it politically poisonous in Washington.”
“I don’t think any of us want us to go the direction of the social welfare states around the world,” Cantor said.