Bill Clinton: “It is feasible if it's not regressive. In other words, you could lower the income tax and have a value-added tax, so…”

“It is feasible if it's not regressive. In other words, you could lower the income tax and have a value-added tax, so- called national sales tax, but if you did that at a high level, that is, if you're going to replace the income tax or most of it, it would have to--[inaudible]--and you would have to exempt food and housing and the basics of life. It's something that we may look at later on. Most countries have a small national sales tax to replace part of their income tax. And the reason they do it is it helps your exports, that is, you don't apply it to things you sell to other countries, but you do apply it to things other countries sell in your country. So it helps your exports, and it helps your competitive environment at home more than the system we have. But it's such a big issue, I thought we ought to face the economy and health care first. When that's out of the way there will be plenty of time to debate the tax system. But it is a big change for America. And most Americans don't trust us to fool with their pocketbooks anyway. So it would have to take a big long debate, where people were absolutely concerned that it wasn't going to be regressive and unfair to the middle class. Ms. Zahn. President Clinton, we're going to take a short break again right now, at 29 minutes after the hour. We'll be back. [The network took a commercial break.] Mr. Smith. We are back live in the Rose Garden, and we've had a couple of microphone problems which we think we have fixed now. What did you just say?”