Value-Added Tax for U.S.
Robert Kuttner’s proposal for a valued-added tax (Op-Ed Page, Feb. 2) merits serious consideration. It is time for broader public debate to take place on the need not only for added taxes, but for new and more imaginative methods of taxing. Before the presidential campaign is over the candidates may be forced, reluctantly, to come to grips with the problem of tax increases.
We must provide revenues to cover essential needs, particularly for infrastructure investment. Politically, an increase in income taxes may be infeasible. VAT or some other form of a consumer tax is called for. The people are willing to pay for what is needed.
There is a danger in timing the introduction of new taxes. The overindebted consumer is likely to be cutting back his spending this year. This sets the stage for a recession. A tax increase exacerbates this danger.
Therefore, whatever tax reform is devised, it must encourage investment, both private and public, to offset lagging consumer spending and to enhance industrial spending. The need for massive infusions of infrastructure investment may be viewed as an opportunity and a well-designed VAT may furnish an answer.
J. MORLEY ENGLISH
Camarillo
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