This pretty much kills Len's VAT idea, unless the VAT is totally hidden (which essentially makes it a payroll tax). I think revamping Medicare is probably a step too far for the present. The tax reform that does make sense is to consolidate payroll taxes, low rate personal income taxes (and the first 25% of the higher rates) and corporate income taxes into a single tax expanded business income tax. Fiscal conservatives may bemoan making taxation invisible for most people, so a VAT could be initiated to fund domestic military and civilian non-entitlement spending (meaning veterans health and military retirement would not be funded by the VAT). The Business Income Tax would fund entitlement spending and health care reform, as well as veterans programs. It would also be the vehicle for payment of the Child Tax Credit, which could be expanded at the cost of the Mortgage Interest and Property Tax deductions. The residual high personal income tax would fund overseas and naval sea operations, net interest, debt repayment and any transition costs for establishing personal Social Security and Military Retirement Accounts. I've been pushing this plan pretty hard on TaxVox, as well as the LinkedIn VAT Group and in Submissions to the Record on the Hill. I hope someone is listening. If they are, they aren't listening hard, as the reform I have outlined is a natural way out of our financial quandry (and it has the seeds of reform at the state level, since following this basic outline could be useful in entitlement reform - especially if education is considered an entitlement).