“We can’t think that we’re going to raise the revenues we need just on the backs of the rich….So, we’re going to have to consider fundamental tax reform. An, we may actually have to consider alternative revenue sources.
Virtually every developed country has a VAT. The revenues that are raised with a value added tax, for instance, can he used for paying down the deficit, can be used for reducing payroll taxes, could be used to reduce individual income tax rates.
In terms of the corporate tax, I think we have a real problem. We have the second highest statutory rate in the developed world. The rest of the OECD countries – the rest of developing countries – have been lowering their corporate tax rates. We’re in a world, now, where capital is very mobile. It an move from one country to the other very easily. So, we need to raise more revenue, but we always have to worry when you raise tax rates, you discourage economic activity.
In terms of tax reform, what you want is a simpler tax system, a fairer tax system, and a more efficient tax system. You want a tax system that people have faith in.”