Bill Clinton: “Well, first, let me say I have proposed a Btu tax, and I'd like to come back to that. I have not proposed a VAT tax. I…”

“Well, first, let me say I have proposed a Btu tax, and I'd like to come back to that. I have not proposed a VAT tax. I have not. There have been a lot of rumors about it. It's interesting that you should know with whom a VAT tax is popular. Hillary's health care group, the First Lady's health care group, was asked to consider a VAT tax by an unusual coalition of big business and labor interests. Why? Because other countries have a VAT tax. Most other countries have a VAT tax of some kind, and we don't. And a value-added tax is one of the few ways that you can--somebody who advocated it now wants to get off of it. [Laughter] Anyway, a value- added tax is one of the few ways that you can avoid taxing your own exports and tax someone else's imports. That is, it is placed on things sold in your country. So when our competitors in Europe, for example, have a value-added tax, when they produce things for sale in the United States, it's not subject to the tax. When we sell our stuff over there, it's already carried the full burden of our taxes, and it gets hit with the VAT. So there are a lot of business and labor interests who believe that, conceptually, even if we lower some other tax, we should embrace the VAT tax because it helps us in international trade. I had never thought of it as an answer to the health care problem, because I thought it would aggravate the maldistribution of paying for the problem. It would allocate the burden of paying for the problem in ways that I didn't think were particularly fair. But that's what it is. Now, on the Btu tax, let me say that America taxes energy less than any other country. There were a lot of suggestions for how we might raise funds to reduce the deficit. The energy tax clearly is the thing which, for all kinds of reasons, had the biggest impact on the financial markets. I was reluctant--there were people who said, ``Well, you ought to have a carbon tax. That's the most polluting.'' I thought that was unfair to the coal-producing States. Then there were people who said, ``Well, we have real low gas taxes.'' We do, but States also set gas taxes. ``We have real low gas taxes. You ought to have a gas tax.'' I thought that was unfair to the rural areas, particularly west of the Mississippi where they have much higher per-vehicle usage. The reason we decided to go with the Btu tax is that you can put it uniformly on all sources of energy so that it doesn't fall with incredible disproportion on any given sector. Now, the problem is that for the sectors that are especially energy-intensive, it hurts them more than a gas tax. And it hurts people who don't pay anything for their energy now. So farmers, for example, that had a fuel tax exemption are dealing with this burden. And you know, we've tried to come to grips with that. I don't think there is a perfect solution. But I like the Btu tax, because it promotes energy conservation, it's good for the environment, and it's fairer, I think, to every region than any other energy alternative that we could devise. Let me follow up on that. We tried to increase the earned-income tax credit--that is, the proposal--so that for people with earnings of $29,000 a year or less, $30,000 a year or less with families, the impact of the Btu tax would be offset by the increase they'd get in the tax cut under the earned-income tax credit. Economic Program”