Representative Paul Ryan (R-WI), one of Congress’ most interesting members, was the guest at this morning’s session of TPC’s Tax Reform 2.0 series. He came to talk about his Roadmap for America’s Future—a comprehensive plan for dramatically restructuring both entitlement spending and the tax code. Ryan is nothing if not ambitious.   more »

Is it time for the U.S. to consider a Value Added Tax? More and more tax experts think so. But the politics isn’t yet getting easier. One problem: While more specialists are joining the VAT fan club, they can’t agree on what to do with the money. TPC’s Len Burman has proposed a VAT to supplement the income tax and pay for health care. Michael Graetz, once a top tax aide to the senior George Bush, would use one to get most Americans off the income tax. At the TPC/Tax Analysts tax reform conference on Dec. 5, Pam Olson, who was a top tax aide to the today’s President Bush, endorsed the levy as a way to buy down corporate tax rates. Once the tab comes in for the trillions of dollars Washington is spending to stimulate the economy and bail out the financial markets, I am certain others will propose a VAT simply to help pay the bills.    more »

Before you head out for Black Friday shopping, take note of what can happen with a European-style Value-Added Tax run amok, courtesy of our friends at TaxProf. In a paper presented Nov. 18 at the University of Connecticut Tax Lecture Series, Oxford University's Rita de la Feria described the amusing but instructive case of Jaffa Cakes. If these confections were indeed cake, they would be treated as food and thus exempt from the VAT. If, however, they were cookies, they would be subject to the full 17.5 percent rate.    more »

Like it or not, health care and taxes are inextricably linked in the U.S. The employer-sponsored health system that covers most of the non-elderly is largely built on nearly $200 billion in income tax breaks. The biggest: employer-sponsored insurance which is tax-free to workers. Perversely, this structure provides the biggest tax breaks to the highest income workers who get the most expensive plans.   more »