Brit Hume on a possible value added tax after the Nov elections

What is a Value added tax (VAT)?

A value-added tax is a fee that is assessed against businesses by a government at various stages in the production of goods or services -- usually any time a product is resold or value is added to it.

For tax purposes, value is added whenever the value of a product increases as a result of the application of a company's factors of production, such as labor and equipment.

The tax must be paid by every company that handles a product during its transition from raw materials to finished goods.

For example, tax is charged when a manufacturer sells to a wholesaler and again when a wholesaler sells to a retailer.

On the surface a value added tax may sound innocent enough but when implemented, it will change the price of goods and services significantly.

The worst part of a value added tax is that it is a regressive tax, meaning the poor pay more, as a percentage of their income, than the rich.

The fear that Obama will impose a value added tax is very real. He must find some way to pay for everything from the disastrous ‘cash for clunkers’ to the multitude of bailouts. It’s the pork laden ObamaCare and the costly bribes it took to get it passed that will bring down his financial house of cards without a value added tax.