Could a national sales tax be on the horizon?

Since the Great Recession ended in mid-2009, America's real GDP growth has averaged just 1.8 percent a year, well below the nation's prerecession average of 3.5 percent growth.

Slow growth in the economy demands tax reform, according to some economists.

In response, Ed Liva, director of the Villanova University Graduate Tax Program, is hosting on Thursday the law school's first Tax Policy Symposium, "Fundamental Tax Reform and Tax Policy Issues in Election Year 2016."

The featured speaker, Rep. Patrick Meehan (R., Pa.), will offer an update from the House Ways and Means Committee and ideas to update the country's twisted income-tax system. Other speakers include tax experts from Deloitte and KPMG, as well as Villanova professor J. Richard Harvey and Madeleine Barber, chief tax officer at Tyco.

Tax-policy wonks contend that the last round of reforms from 1986 desperately need updating, perhaps even scrapping, in favor of a new regime that might include a consumption tax.

In Australia and Europe, that's called a VAT, or value-added tax - better known here in the U.S. as a national sales tax.

VATs are controversial, "with the political left arguing it adversely hurts the poor, and conservatives arguing that these levies raise too much money for government spending," Liva noted.

In Puerto Rico last week, the legislature overrode the governor's veto of a measure repealing a VAT to raise money to offset the island commonwealth's debts. Thus, no VAT for Puerto Rico.

Villanova University's forum is scheduled for 8 a.m. to 2 p.m. at its Charles Widger School of Law, 299 N. Spring Mill Rd., Villanova. The symposium is free and open to the public, but you must register at the law school's website (

Yellen to speak here

Federal Reserve Chair Janet Yellen is due in Philadelphia on June 6 to address the World Affairs Council at the Hyatt at the Bellevue Hotel.

Local investors wager she will broadcast interest-rate hike intentions.

"I am hoping she prepares the market for the likely outcome of the June Fed meeting, perhaps signaling the higher or lower probability of a June rate hike," said PNC chief investment strategist Bill Stone.

"If she comments about Brexit worries being significant, that might indicate holding steady for June" instead of raising short-term rates, Stone added. (Brexit refers to Britain's June 23 vote on exiting the European Union, ending its membership in that economic and political partnership.)

What are some investors holding as a bet on rising interest rates?

"We've been expecting a 0.50 to 0.75 percent increase in the Fed funds rate this year - one hike in June and one in December," said Jason O'Donnell, chief investment officer of Bluestone Financial Institutions Fund, part of the Wayne investment shop founded by Main Line banker Ted Peters. "That's a huge departure from January through early April, when market consensus was that rate hikes were off the table."

Small- and mid-cap banks levered to higher rates have rebounded nicely in the last few months, as they would benefit from higher interest rates.

Bluestone holds Bank of the Ozarks, Suffolk Bancorp, and SVB Financial Group, the holding company for Silicon Valley Bank, a commercial bank that serves emerging growth and middle-market growth companies focusing on technology and life sciences.

"All three have a long way to go higher, although Silicon Valley has rebounded nicely," O'Donnell said.

Meanwhile, in commercial real estate banking, the industry's lending boom may be in its final innings, he said.

"Regulators made it a priority to crack down on commercial real estate lending and increase scrutiny. That's manifesting itself in a few ways," O'Donnell said.

Requiring enhanced and more expensive reporting, and higher capital standards "could have a significant impact on bank stock prices."

That could precipitate mergers and acquisitions in the space, particularly community banks such as Peapack-Gladstone Financial Corp. in New Jersey, which the Bluestone fund also owns.

215-854-2808 @erinarvedlund