The federal budget deficit is projected to approach $1.3 trillion next year, the highest ever except for this year, when the deficit is forecast to exceed $1.8 trillion. The Treasury is borrowing 46 cents of every dollar it spends, largely from China and other foreign creditors who are growing increasingly uneasy about the security of their investments.
Treasury Secretary Timothy F. Geithner considers a VAT(Value-added tax) VAT is cited in "Keys to Economic Understanding" published in 1976. The book is dedicated to the American decision makers. Search such book at www.Amazon.com for reference.
Yale law professor Michael Graetz estimates that a VAT of 10 to 14 % would raise enough money to exempt families earning less than $100,000 -about 90% households from the income tax and would lower rates for everyone else.
Graetz's proposal drew an endorsement from Paul Volcker, who called it a sensible plan for reform. It also has piqued the interest of Conrad,the Chair of Senate Budget Commitee that it could be modified to accomodate Obama's pledge not to raise taxes on families who make less than $200,000 a year. That remains to be seen.
Francis Shieh aka Xie Shihao who is interested in funding for health reform and other programs for global economic recovery in the months or years to come in the 21st century for the wellbeing of the peoples of the world.
Wednesday, May 27, 2009 at 10.16 a.m.