- It is quite logical and very probable that the VAT will
become reality. There is no doubt that taxes must be increased to pay
for all the spending. Obviously that will have a depressing effect on
sales and business. You might not think twice about buying something at
today's prices. But tack on 20% to the base price, and it is highly likely
that you will skip the purchase altogether. Such will be the impact
of VAT.
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- Moreover, the IRS will need a substantial increase in
staffing to enforce collection of this new source of tax revenue. Existing
resources are already stretched to the limit trying to collect income and
social security withholding taxes from straped employers.
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- If you need to make any major purchases, I suggest you
do so now to avoid the VAT! Besides, it will be good for the economy...
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- THE VAT IS COMING
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- This administration is now "considering" a
VAT tax for the U.S. similar to what they have in Europe to pay for our
out of control entitlements. It simply means a Value Added Tax. The Europeans
accept it because the taxpayer doesn't pay for it directly and it can
be gradually increased by government as the cost of entitlements continue
to rise. Obama likes all things European.
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- It is a tax that is added to a product at various stages
of the production and distribution process and is then presented to
the taxpayer as a part of the total cost of whatever it is that they are
buying rather than as a sales tax at the point of purchase.
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- It is more readily acceptable to taxpayers because it seems
invisible as a tax. But it is why the same item costs you about twice as
much in Europe as in this country.
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- Having just added the largest new entitlement in 65 years
to existing entitlements already bankrupt, Dems must either cut dramatically
or tax dramatically. Chairman Ben S. Bernanke spelled out the risks in
a speech calling for restraint of public spending on entitlement programs.
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- Taxation is a depressant on economic growth and
economic growth is essential for the needed tax revenue. This why taxes
are not the answer. Government must do what every citizen and every corporation
is now doing; it must bring spending in harmony with income.
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- But Dems do not cut entitlements. It is against
their religion. But they do raise taxes which is a part of their religion. And
the VAT is relatively invisible so it is very attractive because it
is not a direct tax on the taxpayer. Obama will still be able to maintain
the fiction that he is not raising middle class taxes on citizens which
is partially true because the tax is placed on products ---not people.
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- The question is how to resist the VAT? I have some ideas.
Why not make VAT stand for "Very Angry Taxpayers" instead of
Value Added Tax. Another idea might be " Too Much Vat Makes
Government Obese". You might see me at the next tea party carrying
this placard!
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- Europe and the U. S. have not seen debt levels top their
national output or their gross domestic product since the years after World
War II; an era when booming growth, a young population and the fact that
we were the only country whose manufacturing base was not devastated by
war damage. It made us unique in the civilized world. None of this
is true now.
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- Fed. Chairman Bernanke of course was both the
Bush choice and the Obama choice for his present role so we must assume
he knows what he is talking about. But is anybody listening? The Democrats
are now celebrating the addition of a major new entitlement program while at
the same time their own Fed. chairman is warning that all these programs
must be cut back.
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- The correct term for this kind of aberrant behavior now
going on is political schizophrenia.
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- Obama has set up a committee to advise him about what
must be done. They are scheduled to report back in November right after
the election, which timing is not an accident. It will allow eight
more months of greatly accelerating debt to accumulate. Hopefully by then
the whole country will have reported back to him with a clear message---cut
spending.
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- -Stan French
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