Value-added tax (VAT) looms in our future

Is there a value-added tax, or VAT, in our near future? According to a story by Shawn Tully in Fortune, this new tax scheme is not only possible, but perhaps inevitable, given the danger to the U.S. economy posed by our enormous and growing national debt.

The article cites a recent sobering report from the Congressional Budget Office about the ramifications of our growing national debt. In comparison to our gross national product, our current deficit is the highest since WW II. The CBO did one projection assuming that the Bush tax cuts were extended, the alternative minimum tax was indexed to inflation, and income tax revenue yielded 19% of GDP. The results? By 2020, our debt would equal 90% of our GDP; by 2035, 180%.