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Jennifer Marks

Big Whoop

August 26, 2010

File this one under the heading: "Did they really need to do a poll on that?"

The National Retail Federation - which does a lot of good consumer research - just released a survey showing 64% of consumers say they will reduce their spending if the United States adopts a value-added tax.

According to the survey, areas where consumers would cut back the most if a "federal sales tax" or VAT were created would include eating out (83 percent), clothing or accessories (80 percent), food/groceries (74 percent), entertainment (72 percent) and vacation travel (72 percent).

Additionally, half said a VAT would influence their spending on a home (50 percent) while two-thirds said it would impact automobile purchases (63 percent). Big-ticket items wouldn't be the only casualties as 59 percent of consumers said they would even cut back on prescription and over-the-counter medicine.

Instead of creating a new tax, 82 percent believe Congress should reduce the federal deficit by spending less. Only 10 percent of respondents favored creation of a VAT or other form of federal sales tax to reduce the deficit, and only 8 percent favored an income tax increase.

I'm not sure a VAT would apply to home purchases as residences are not generally considered "consumer goods." But whatever.

In the meantime, if you really want to tear your hair out, try to balance the U.S. budget in this interactive game.

Whichever party you belong to, you will discover you can knock down every single program the other party holds dear and still not come close to closing the gap without sacrificing several of your own sacred cows.

And bonus! This game was put together in 2004 - when the Iraq and Afghanistan wars were being run off the budget and before the 2008 bail-out and 2009 stimulus. So however close you get to balancing the 2004 budget - and you'll have to be pretty brutal to get there - you'd have to go ever further to take care of today's situation.