In her campaigns to break the power of the trade unions and denationalize key industries back in the ’80s, Britain’s prime minister, Margaret Thatcher, was fond of proclaiming that “There Is No Alternative.” She repeated the slogan so often that unsympathetic newspaper editors abbreviated it to TINA, and eventually started calling the prime minister herself “Tina.”

I’ve been reminded of the Iron Lady recently by a growing sense of the inevitability of a nationwide value-added tax for the United States. It’s looking more and more like There Is No Alternative to the VAT.

First off, if, as seems likely, the Democrats succeed in banging health care reform through Congress and finally get a bill to the President’s desk, a VAT is the only practical way, in the long run, to pay for it. If you want a European-style, welfare-rich society, you’d better get reconciled to a European-style, VAT-rich tax regime. They are two sides of the same coin.

Second, a VAT is the only tax revenue raiser that stands any chance of gaining support from both liberals and conservatives in Congress. Everyone agrees that the deficit demon has to be exorcised. As Diego Denczuk, tax system specialist with transaction tax management provider Sabrix, notes, “the question now is simply deciding which method is more appropriate to raise the necessary revenue. Compared to other potential revenue sources, a VAT may not be any harder to achieve politically. In fact, because of health care, it may be an ideal option.” (Denczuk’s article, a thoughtful look at the prospects for VAT, is available here.) Liberals have always opposed VAT because by its very nature it’s regressive, but for low-income families “a VAT to pay for health care may seem like a reasonable trade-off.”

What’s in it for conservatives? It’s relatively free of the economic distortions that most taxes generate. And it extends some of the burden of deficit reduction to segments of the population that currently pay no income tax.

Strangely, the fervently pro-market, antitax Mrs. Thatcher was brought low by her attempt to introduce an unfamiliar tax — the poll tax — to the United Kingdom. A similar fate may await any politician brave enough to introduce VAT to the U.S., unless he or she can convince enough Americans that There Is No Alternative. ###