Running out of tax options: How about a VAT?

While President Obama has pledged that he won't raise taxes on families earning less than $250,000, his advisers are beginning to realize this won't be possible without vastly increasing taxes on the wealthiest -- to a top income tax rate of about 70 percent.

That won't exactly fly, so what else can Obama do? Former Federal Reserve chairman Paul Volcker, and other tax experts, are calling for a value-added tax or VAT.

That would mean that everything you buy would cost more. Unlike sales taxes, VATs are added throughout the production of goods, so the price charged for those goods will likely rise to cover the costs of that tax. While Volcker is not recommending that taxes be raised until the economy recovers, he does recognize that if spending can't be cut, revenues must be increased.