Obama to propose a value added federal tax?

Club Wagner:

With this post, we announce the formation of Club Wagner. It’s a (fictional) organization of people willing to acknowledge a basic economic reality: Taxes in the United States must rise.

Bernanke and Volker seemed to have joined.
So Tyler Cowen reviews the literature and comments:

The authors -- Michael Keen and Ben Lockwood -- conclude that a VAT is a "weak" money machine in the sense that increases in a VAT are partially offset by declines in other tax rates.

A value added tax is like a sales tax at each level of production, applied throughout the US economy. If Tyler is correct, then the VAT tax will take away from state revenue. I doubt the economy can survive without state and local governments playing some role, but a federal VAT all but eliminates state government. We still have a major contradiction between local government and federal government. My opinion is that the necessity of viable local government will eventually win out, and the federal government will be forced into a restructuring .

VAT is simply not supportable over our large and heterogeneous economy.