By David Galland in Casey's Daily Dispatch:

It's hard to square the idea of adopting a [Value Added Tax] with Obama's firm pledges not to raise taxes on the middle class by "one single penny." Should his administration preside over the adoption of a VAT tax, it would unquestionably be seen in much the same light as the "Read my lips, no new taxes" pledge that, when broken, did so much to overthrow George Bush the First.

Unlike most progressive taxes, the VAT would be nearly impossible to rig in such a way that it would leave the masses untouched. Typically, to appeal to the masses, the government would set some sort of income test, under which you wouldn't have to pay the toll. But that won't work with VAT, because like kudzu, the tax winds itself through every level of economic activity. Detangling it in a politically acceptable way is simply impractical.

Of course, the administration and its congressional allies could try to pull this off by trying to position it as a tax on business, versus individuals. But I have to believe that line of reasoning would quickly be revealed for the scam it is. If businesses didn't pass those taxes on to consumers, they would soon be out of business – it's as simple as that. The Heritage Foundation has done some work on this and found that if VAT was instituted and allowed to rise to the levels now prevailing in Europe, the average American household would spend upwards of $10,000 a year on the tax.

Crux Note: Casey's Daily Dispatch comes free with a subscription to a Casey Research advisory service. You can learn more about their flagship service, The Casey Report, here (highly recommended).

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