More taxes? Tim Geithner and Alan Greenspan Won't Rule Out New Taxes for Middle Class

story by CNN

Both current US Treasury Secretary Tim Geithner (photo left by NJ.com) and former Federal Reserve chairman Alan Greenspan, appeared on ABC Sunday political show "This Week", insisted that the economy would not collapse. http://abcnews.go.com/Video/playerIndex?id=8233013

They said, however, that emergency steps, including the bailout plan last year and the economic stimulus bill this year, are expanding the federal budget deficit to unsustainable levels.

"We will not get this economy back on track, recovery will be not strong and sustained, unless we ... can convince the American people that we're going to have the will to bring these deficits down once recovery is firmly established." Geithner said.

Geithner refused to rule out future tax increases, saying President Barack Obama's administration would take whatever steps were necessary to reduce the deficit once the economy recovers. Greenspan said he believed the government eventually will impose some kind of value-added tax to raise revenue.

A value-added tax is assessed on the transfer of goods and services from production to delivery, with consumers ultimately paying higher prices. It differs from a sales tax, which is directly assessed on consumers when they buy something.

Greenspan called a value-added tax "the least worst solution," calling it "the only thing that raises revenue in significant quantities without significantly impacting the economy."