Like the NST, a VAT is a regressive tax, taxing lower- and middle-income consumers for a larger portion of their income. A few voices in Congress have raised the idea of a VAT over the last 20 years, but they have been quickly drowned out by those who equate a VAT with high European taxes. “There’s never been much support in this country for a VAT, even though every other industrialized country has one,” San Jose State University’s Nellen says. “Politically it carries a lot of baggage.”

Bartlett, who has no love for new taxes, believes that it may be necessary to add a VAT to our current income tax regime to stem the rising government budget deficits caused by Bush tax cuts, growing defense expenditures and the impending retirement of the baby boomers. “I’m concerned that our long-term structural deficit problem may precipitate some financial crisis like the 1987 stock market crash,” he warns. “A loss of international confidence in the U.S. economy and the low dollar may cause a moment to come when everybody decides that we have to do something about the deficit.” Bartlett contends that a VAT could help pay down the deficit while also funding lower income tax rates.

The federal budget deficit, which for 2004 totaled roughly $400 billion, looms large in any debate on tax reform. According to the Congressional Budget Office, “if all of the tax provisions scheduled to expire were extended together, the revenue projection for 2006 would be about $16 billion lower. That revenue loss would grow to $45 billion in 2007 and $95 billion in 2010, before jumping to nearly $250 billion in 2011 and then reaching $422 billion in 2015. Over the entire 2006-2015 period, revenues would be reduced by about $2.1 trillion.”