Paul Volcker Advocates Tax Hikes, VAT

President Obama's advisor Paul Volcker today said that the U.S. should consider raising taxes and implementing a value-added tax.

"Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax "was not as toxic an idea" as it has been in the past and also said a carbon or other energy-related tax may become necessary.

Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves. "If at the end of the day we need to raise taxes, we should raise taxes," he said."

This is what's known in political circles as floating a trial balloon.

And if anyone has the bona fides to broach the subject, it's the man who as Federal Reserve Chairman in the late 70's and early 80's made the unpopular but ultimately successful move to choke off inflation by mercilessly raising interest rates.

But Volcker is out to lunch if he thinks installing a VAT would somehow be receptively received today.

Is he really serious in believing that, in the face of a massive recession and with sky-high unemployment, Americans are going to willingly pay an extra 15% or more for the goods they buy, in addition to all of the federal and state taxes they already pay?!?

It would certainly be one thing if the proposal was to scrap federal income taxes in favor of a national VAT.

But the Obama Administration is sending signals that they want Americans to pay both forms of taxes.

Obama and other Democratic politicians should start packing their bags and brace themselves for upcoming election defeats if they believe moving this proposal forward is actually going to fly with Americans.