the v.a.t. the coming of socialism. you know, the idea of taxing consumption and looking at a v.a.t. -- i mean, as we've set repeatedly, i think everybody said it including leader hoyer, everything needs to be on the table. we really need to take a serious look at this. it will take americans a long time to figure out what it is and come to grips with it. but lots of times a novel idea of 20 years ago becomes serious mainstream thinking today. so, yes, we should look at it. >> state and local governments have their own problems. because of medicaid costs, underfunded pension plans, underfunded employee healthcare and deferred maintenance and other infrastructure costs, higher education expenses, et cetera. and they're going to end up hitting the wall before the federal government because they can't print money. and because they have to be more concerned about their credit ratings. ultimately, the u.s. government is going to be concerned but the states have to be concerned about it now. the problem is how are we going to deal with this fiscal gap? a

the only way i imagine a v.a.t. taxcted in a grand bargain with extremely deep, deep, deep income tax cuts. you can't put it on top of the existing system politically. and it couldn't happen until we had a huge debate about tax reform and entitlement reform. the v.a.t. tax is not going to just be plopped in somehow on top of what we already have. >> i think one of the items in the contract for america -- if i come back to the tea parties one last time. it's a good contract. look at it. tax reform. there is a pro-family reduction of taxes, tax reform and v.a.t. a perfectly respectful tax. it's great if we had a debate about this. >> what about the spending cuts? >> that is also in the contract for america. >> the president has a fiscal commission meeting later this month and supposed to come forward with ideas, including possible tax increases and spending cuts. where are the republicans joining in? instead of just saying this will lead to higher taxes. republicans have to be -- >> chris: where are the republicans? thank

the income tax or even resulted in a lower income tax rate. the top individual tax rate remains very high in europe despite the v.a.t., with an average on the continent of about 46%. in the u.s., v.a.t. proponents aren't calling for a repeal of the 16th amendment that allowed the income tax and, in fact, they want income tax rates to rise. the white house has promised to let the top individual rate increase in january to 39.6% from 35% as the bush tax cuts expire. while the dividend rate will go to 39.6% from 15% and the capital gains rate to 20% next year and 23.% in 2013 under the health bill, from 15% today. even with these higher rates, or because of them, revenues won't come close to paying for the obama administration's new spending, which is why it is also eyeing a v.a.t. thanks to the recession and the stimulus, u.s. federal debt held by the public has now reached about 63% of g.d.p. and is headed higher. but the oecd forecasts that the 30 wealthiest nations will see debt burdens exceed 100% of gross domestic product in 2011. debt levels in france, germany, spain, and italy are expected to have increased by 30 percentage points of g.d.p. from

the table. there has been speculation as we talked about that a value-added tax, a v.a.t. might be in the cards. chief washington correspondent jim angle reports the administration says no deal yet. >> the white house reacted sharply to a report administration official calculated the impact of a 5% value-added tax to help bring down huge annual deficits. >> this is not something the president has proposed, nor is it under consideration. >> reporter: value-added tax is imposed at each stage of production, when wheat goes to market, made into bread, goes to the store and when the consumer buys it. president obama pledged to eliminate deficit spending by 2015, not counting interest payments of $500 billion a year but many doubt the president is willing to do what is necessary to cut spending. that is one reason experts looked at how much a 5% v.a.t. or value-added tax would raise. >> 5% is $700 billion a year. we would not want to do it right now while the economy is in a recession. we would want to phase it in slowly over time. >> reporter: it also sought to carve out enough

plus, the v.a.t. tax, could it come here and could it work here? the top of the hour for "special report." ♪ ♪ >> glenn: we're back now with ben sherwood and chris edwards. and we're wrapping up our week on trying to train americans to think out of the box. these might not be the answers that we need in the end. but we need to start thinking about what happens if that crazy guy at 5:00 is actually right? what will we do? that is the secret. i learned it from you, ben, when i read "survivor's club." it's the most important thing you can do is think about what if that crazy idea over there is right, right? >> you got to imagine the impossible. >> glenn: okay. >> in fact, that's what snare rows are all about -- scenarios are all about. the best thing a military can do training a fighter pilot is put them in simulators in which the scenarios are so tough when they come back from a real mission over iraq, when they come back from a real war fighting mission, they say oh, that was nothing compared to the simulator. >> glenn: right. >> that is the key. >>

tax policy. that is more likely eating your wheaties. i think we will hear more about the v.a.t. because we have seen large increases in the higher income tax. the u.s. income tax base is narrow. in going forward, the president, the president left us with a simple but powerful choice, we are either going to confront spending or have to have a v.a.t. there is no other political choice. >> we have done a lot of work on tax policy over the last couple of years internally within the business and our conclusion is if we could restructure the tax code and have a v.a.t. that wasn't an add-on, this would be a good step. the challenge is how do you get that without it having been an add-on. one of the things i was going to say, one of the real problems we confront and the climate that's being created in this country is the huge deficits we are facing sm the congressional budget office analysis of the president's budget which said $9.8 trillion in additional debt over the next 10 years. 90% of g. d. p. by 2020, this is staggering and very disconcerting and certainly creates lots of pressure

the things that are contained on this page. and get this. get this. all of these additional taxes and what did we hear the other day? someone floated the notion a v.a.t. tax as a way to deal with the deficit and some of the increase in federal spending that is going to occur, the consequence of this health care bill we passed. we heard it last spring when we first started talking about this health care bill, some people talked about, some people from the administration came on the sunday show talked about a value-added tax and that was tram pped down quickly. but now that the bill has passed, maybe we will need the v.a.t. tax to pay for it. that would be a tax increase. that will be a tax increase on some individuals who earn under $200,000 a year. there's no question that unless this congress takes some action before the end of the year and quite honestly i don't know when the time and energy will come to do this, but the tax policies enacted in 2001 and 2003 expire at the end of this year. many of those tax policies will affect people who earn under $200,000 a year. the expiration of the tax policy means reverts -- we revert back to tax levels that

the v.a.t. >> give me a quick one, on the morning show today, robert reich and marty feldsteen, both opposed the paul volcker v.a.t. tax idea. where do you come out on that? >> it's dumb, we should not do it. spending control is the way out of the woods. >> sounds like a kudlow supply-side remark. we'll be right back. scott hodge, and mark walsh. much more work to do when "the kudlow report" continues. (announcer) roundup extended control does two jobs... at once. one: kills weeds to the root. two: forms a barrier, preventing new ones for up to four months. roundup extended control. >>> we continue our theme of april 15th as tax day. another angle, how come half the country doesn't pay any income taxes right now. we have mark walsh and scott hodge. we're going to put the chart up on the full screen, the volume of people not paying any income taxes. your column, once self-reliant, now a nation of takers, what do you make of this, scott? >> i make of it, larry that we've turned april 15th into payday for as many as 52 million americans, who will receive as much as $70 billion in refunds, even though they don't pay income

the senate resolution they don't want a vat tax. the theory has been the 18-member commission on deficit reduction would recommend a v.a.t. cover for breaking his pledge that no one's tax of any sort would be raised on any individual under $200,000 or a household income of $250,000. the problem is, nothing recommendation from this 18-person commission goes to congress without 14 votes. that means two of the republicans, two of the six republicans have to vote for a v.a.t. tax. which one of those is going to? i don't believe it. >> yeah. so, our friend, brother buchanan, pat buchanan, somehow worked with ronald reagan for several years and never got the sunny optimism. he is one of -- you look at his books, the decline of the west, that's one of the more cheery titles. but buchanan thinks the end is near. i actually see a conservative revival coming up over the next generation simply because we're out of money because americans are right of center. because even democrats in california will re-bell after they start realizing they're paying more than 50 cents of every dollar in taxes. am i overly optimistic? >> you're right.

. >> well, explaining the value-added tax, it's a tax added to a product at each step in the production process. every company handling the product pays the v.a.t., value-added tax, and those costs are passed on to you, the consumer. i'm just a little skeptical, mr. burrman, wouldn't this pick on lower income people? >> there is a problem. the value added tax tends to be regressive. there are ways to deal with that. one way is to provide an income tax credit to offset regressivety at the bottom. it's basically the same thing the national retail sales tax people have been proposing. the fact is that under the current system we have these huge taxes and we just haven't decided who is going to pay them. the deficit will be paid by our children or grandchildren with interest and possibly trying to pay it with a wrecked economy because of the damage from the huge debt. you know, i know mr. mitchell would really like to reduce the size of government dramatically but we have a democracy and it's clear that people want more government than the current tax system can support and a value added tax is a relatively efficient way to raise revenue. >> leonar

needs to be raised and we are in all likelihood looking at a new form of national sales tax, the v.a.t. tax, which would be on every item we purchase would have a tax of about 25% attached to it. if you go through the value drive in meal at mcdonald's or a fast food place, though i guess we aren't going to be allowed to eat fast food anymore, that looks like the road we're going down now, instead of paying $1 for that item, now we'd pay $1.25. all this means real consequences for real people's lives. it means fewer choices we can make and apparently what president obama and the democrats who control congress believe is that the american people have too much discretionary income. they really are the party of big government and of government making the choices over our lives. the republicans have a different view we believe people make the better choices and want them to keep their money. unfortunately, president obama laid all his cards down on the table, as have the democrats who run congress and they made a decision. it's very clear we know because the bills are already before us, anyone c

the income tax. if you just want to shriek in the vapors, the value-added tax will destroy everything, fine. but anything we do we'll be doing in some kind of balance. you can't have a v.a.t. tax and then leave the present structure. look at camp conrad, who is a member of this commission. he has written a remarkable book about the entire income tax. how unfair the whole thing is. we have the ability, and i hope the trust of each other, to adjust and put together a package. and if the american people and the congress don't like it, then just let them sink, because greece is sinking on debt and deficit. spain is next. portugal is next. how would you like to be the united states of america when china pulls the tin cup and says we don't want t-bills, we want money? that's where we are. it's serious business. >> chris: all right, senator, your deadline for coming up with a proposal for the president and congress is december 1. which coincidently is after the election. is that a cop-out? are you, in effect, giving politicians a pass on having to say what they think about this? and preventing voters from being able to say in the election what they think about these ideas? >> as

it's the valued v.a.t. tax, which is used in many industrialized countries, especially in europe, as a type of sales tax in which each stage of the production process is taxed. the keanlt of raising huge amounts of revenue for the government, but it is lothe by many republicans, including dick armey, who heads the anti-tax group freedom works. also this morning, front page of the "wall street journal," as the focus continues on the greek economy and a greek bond prices, which is spreading. this is from the front page of the "wall street journal," the concern over the potential electric bidity shortage in greece's private sector banks, fueled a sharp selloff in the greek debt and the equity markets on thursday, suggesting that the european union's efforts to defuse the crisis with a vague promise for international monetary rescue have all but failed. that's the i.m.f. markets signalled fresh worries that the greek banks have having the trouble meeting immediate funding needs after the country's top four banks on

bill: in the meantime the white house playing down reports that president obama is considering a national sales tax, known as a v.a.t., value-added tax. take that, we say. it's widely used in europe to keep deficits down but critics say it will overburden already struggling american families and the entire u.s. economy. here's the press secretary robert gibbs, asked about it just yesterday. >> is there anything this administration is doing to consider, calculate, pose, in any way, shape or form, way or measure, a potential decifit implications or economic implications of a value-added tax? >> this is not something the president has proposed, nor is it under consideration. bill: that was monday. listen to what the president said about the v.a.t. yesterday on wednesday, quoting know -- now, i know there's been talk lately about the value-added tax, that is something that's worked for some countries, it's something that would be novel for the united states, end quote, going on to say they want to see what all the options are to many of those, he did not want to rule out. for a fair and balanced debate, ad adam geller,

spiral, he's going to say that we need a value added tax of about 15% to 20%, which they're probably going to pass through after the election. and a v.a.t. tax which means if you buy a $10,000 it will be $12,000. this is a tax and spend administration. we have the biggest deficits in the history of the united states. and when i hear my colleagues talking about all the good things they're doing for america, i wish they'd look at the unemployment rate and look at what people are taking out of their salaries and what this country is going through economically. it ain't what they're saying. the speaker pro tempore: for what purpose does the gentlewoman from california rise? >> to address the house for one minute and to revise and extend my remarks. the speaker pro tempore: without objection, the gentlelady is recognized for one minute. ms. sanchez: thank you, mr. speaker. i'm here to recognize the new start treaty that was recently signed by president obama and the russian president. the recently released 2010 nuclear posture review. i believe it's important to realize that the cold war is over, and it's a time to align our nuclear policy w

them and if congress will pass a cap and trade bill that will raise the cost of energy, they're hearing congress talk about v.a.t. taxes, gasoline taxes and they see congress spending and borrowing money i it doesn't have running up record deficits. they say, congressman, we're uncertain about the future in this country. when i go clubs and meetings, i ask people in the audience to raise their hands if they're live ought a better life than their parents. everybody's hand raises. when i ask how many people think that their children and grandchildren will live better than they are today, their hands are down. we cut spending, cut taxes and get the american people back to work. the speaker pro tempore: the chair lays before the house the following personal requests. the clerk: leave of absence requested for ms. mccollum of minnesota for today until noon. the speaker pro tempore: without objection the request is granted. for what purpose does the gentleman from texas rise? mr. poe: mr. speaker, i ask unanimous consent that today following legislative business and any special orders heretofore entered into, the following me