Comments on VAT

Comments on a VAT.

I have spent a lot of time researching this topic. Finally my education is paying off . . . but sadly at a time where this forum is my only method of expression.

Liberals in Congress want to pay for massive new spending with a value-added tax (VAT), a national sales tax on the price of goods at each stage of production. To further explain, this tax would be levied (for example) on raw goods, then on production, assembly or packaging, transportation, warehousing, distributor, retailer, etc. A tax on EACH LEVEL Popular with socialist governments in Europe, such a tax is a very bad idea for the United States. Thankfully the majority of lawmakers and even White House officials seem to agree (at least at present). Last week, Sen. John McCain (R-AZ) headed a bunch of 85 Senators in denouncing a VAT in America. Although non-binding, the position of the Senate resolution accurately stated that a VAT would "cripple families on fixed income and only further push back America's economic recovery."

Shortly after the Senate vote, that paragon personality of White House Press Sec. Robert Gibbs said (or glibly insinuated) that a national consumer tax "wasn't something that the president had under consideration." In typical eloquence however, President Obama seems to be on different 'wave length' On Wednesday the President said a value-added tax on Americans is still on the table for consideration. He said, a VAT " is something that has worked for some countries and it's something that would be novel for the United States."

Numerous noted economists claim that a VAT would actually invite greater spending and national debt since it would be levied in addition to all other taxes (like income, gasoline, alcohol, etc., and most sales taxes (which are either state or local)..

According to the 'Heritage Foundation', imposing a VAT is necessarily critical to the liberal governmental control strategy. First, they propose to raise spending as fast as possible, something where our President and his minions have already been very successful. Federal spending is up almost 25% per quarter since 2008. The recent passage of Obamacare promises to keep that trend rapidly expanding for untold years into the future.

Also, a value-added tax cannot be easily detectable by the consumer, while being extremely costly. One should note that the less visible a tax is, the more revenue can be collected without resistance or voters revolt. It is natural that those 'tax and spend' liberals in Congress support this option. This should not come as a surprise. There are many conservatives and economists who have always believed the Democrats would add a VAT if, and when, they gained control of the White House and both Chambers of Congress. Their liberal causes create huge spending habits and simple economics dictate that they need to raise money to do it. Another example of 'the ends justifying means'.

There is no question that a VAT would generate massive new revenues for the federal government. However, the largest tax hikes, always harmful to the economy, cannot off-set the increasing rate of federal spending, especially on programs like Social Security and Medicare. The more money taxes give to the government, the more the 'something for nothing' crowd clamors for more financial assistance. There is never an even trade.

Common sense should tell you that reducing federal spending and reducing dependency on government are the only workable solutions to lowering the deficit, restoring prosperity and creating greater employment. A value-added tax does none of these.

Voters must let their objections be heard . . . and vote accordingly.

DE