The Debt Is Real. The VAT Isn't the Only Answer.

What Happened

Peter J. Tanous, writing in The Hill, argues that America's $40 trillion national debt can only be solved through a value-added tax, a broad consumption tax levied at each stage of production. He frames spending cuts alone as insufficient and positions VAT as the necessary revenue measure.

The claim deserves scrutiny, not because the debt is fictional (it isn't), but because the argument skips the actual evidence about how we got here.

What It Means for You

A value-added tax would hit you every time you buy something, groceries, gas, rent, medical care. Unlike income tax, which goes up with what you earn, a VAT hits the same whether you make $30,000 or $300,000. A family earning $50,000 a year would pay a much larger share of their income than a family earning $500,000.

This matters because it's a choice, not a necessity. The debt is real. The question is who pays to fix it.

Right now, the wealthiest Americans pay a smaller share of their income in federal taxes than middle-class workers do. A CEO earning $10 million may pay an effective tax rate below 20 percent, while someone earning $100,000 in wages pays closer to 25 percent. A VAT would deepen that gap, not close it.

The Bigger Picture

The United States didn't wake up in 2026 with a surprise debt problem. It inherited one, deliberately constructed.

In 1992, after the Reagan and Bush Sr. presidencies, the federal deficit was 4.7 percent of GDP. By 1998, under the Clinton administration, it had flipped: the government ran a surplus. The Congressional Budget Office projected surpluses stretching decades into the future. The mechanism wasn't mysterious. Higher tax rates on the wealthy, combined with spending discipline, worked.

Then came the Bush tax cuts of 2001 and 2003. The top marginal tax rate dropped from 39.6 percent to 35 percent. Capital gains rates fell. The Joint Committee on Taxation estimated these cuts would cost roughly $1.3 trillion over ten years when fully implemented. They were extended under subsequent administrations. The tax code, as the Common Good Party notes, was rewritten loophole by loophole to serve the ultra-wealthy.

The Trump tax cuts of 2017 cut the corporate rate from 35 percent to 21 percent and further reduced rates on high earners. The Congressional Budget Office estimated the long-term deficit impact at roughly $1.9 trillion over the decade.

The math is simple: when you cut revenue while maintaining or increasing spending, you run deficits. When you restore revenue while managing spending, deficits shrink. Clinton proved it. The data shows it.

That's not ideology. It's arithmetic.

Today, the United States collects roughly 26 percent of GDP in federal revenue, near historic lows for a developed nation. Germany, a comparably wealthy country, collects roughly 40 percent. Denmark collects 46 percent. Higher revenues do not doom an economy. They fund things: roads, schools, research, defense, the care infrastructure that lets people work.

The proposal for a VAT assumes the political system cannot do what it demonstrably did before: ask the wealthy to pay more. That's not evidence-based. It's pessimism dressed as realism.

Where This Goes

The Common Good Party's position is direct: America doesn't have a spending problem. It has a revenue problem manufactured by four decades of tax cuts for the wealthy. The Clinton surplus years proved higher taxes on the wealthy work.

A VAT might contribute to deficit reduction. But it would do so by shifting the burden downward, making a schoolteacher, a nurse, a construction worker carry more of the load. The evidence shows that's neither necessary nor fair.

The real solution requires political will, not resignation. Close the loopholes that let billionaires pay lower rates than their secretaries. Raise the top marginal rate back toward Clinton-era levels. Tax capital gains the way you tax wages. Fund the IRS so it can actually collect what's owed.

The debt is real. The choice about who pays to fix it is real too. That choice will define whether the wealthiest country on earth asks those with the most to contribute fairly, or whether it tells working people to pay a hidden tax on everything they buy.