A liberal think tank with close ties to President Barack Obama says the administration and Congress should consider raising taxes on Americans to help close federal budget deficits, an opening salvo in what is likely to be a protracted debate on tax policy.
In a draft report, the Center for American Progress says the size of projected budget gaps requires considering options including tax increases "In all seriousness, responsible people know that additional revenue has to be part of the mix even if they believe in lower taxes in general," the report concludes.
The center's president and chief executive, John Podesta, who is an Obama adviser, said the administration should consider a tax on consumption, such as a value-added tax system similar to that in use in the European Union. Mr. Podesta suggested that its impact should be limited to protect lower-income people, who otherwise might be hit particularly hard.
White House economic adviser Larry Summers and Treasury Secretary Timothy Geithner refused to rule out middle-class tax increases during Sunday talk-show appearances over the summer. "We have to bring these deficits down very dramatically," Mr. Geithner said on ABC's "This Week." "And that's going to require some very hard choices." But White House press secretary Robert Gibbs disavowed the comments.
The taxes are coming. Obama will wait until he muscles a health care bill through Congress, then the "we need to balance the budget" rhetoric will heat up.
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