The VAT is essentially a national sales tax. It is a hallmark of European welfare states given that is an efficient (if regressive) as well as politically palatable method to raise tax revenue. It is for precisely these reasons that the VAT is such a bogeyman for the Wall Street Journal editorial page crowd. Consider this latest broadside against the specter of a VAT:
We estimate that each percentage point of a U.S. VAT would provide Washington over 10 years with approximately $981 billion with which to launch new spending. So even a small VAT might help reduce the debt-to-GDP ratio. But by making reforms to entitlement spending less likely, VAT revenues would also lead to a permanent increase in spending to 24% or more of GDP (compared to the historic average of 20%). [...]Translation: a modest VAT could reverse our medium-term budget problems, but conservatives prefer to "starve-the-beast" instead to justify rolling back Social Security and Medicare. There is nothing "conservative", in a Burkean sense, about this strategy. Indeed, this is pure Leninism: the worse, the better.
That the Republicans claim the mantle of fiscal conservatism after a generation of running up the debt on tax cuts for the wealthy not only demonstrates the post-modern nature of our politics, but also the milquetoast disposition of the Democrats. It's well past due for Obama to highlight the glaring hypocrisy of the GOP: conservatives do not care about deficits at all.