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April 23, 2010
VAT of Excrement
Posted by The MaryHunter at April 23, 2010 4:30 AM
As the Obama regime continues to spend our country into oblivion, the realization that this level of spending is unsustainable has even occurred to some administration officials. A value-added tax is a tempting and logical next step for this progressive-socialist regime to consider, even though it would not be an easy budget fix in the slightest. Obamanation may think: Why not break a few "no new middle-class taxes" promises made to a nation that already disapproves of its leadership anyway? Even some conservatives support a VAT in principle. But there are many problems with a VAT that we can learn from our European cousins.
VATs were sold in Europe as a way to tax consumption, which in principle does less economic harm than taxing income, savings or investment. This sounds good, but in practice the VAT has rarely replaced the income tax, or even resulted in a lower income-tax rate.
What's more, VATs rarely stay at their original rate at implementation, as shown below.
In 2008, the average resident of West Virginia, one of the poorest American states, had an income $2,000 a year higher than the average resident of the European Union, according to economist Mark Perry of the University of Michigan, Flint. The price of a much higher tax burden to finance a cradle-to-grave entitlement state in Europe has been a lower standard of living. VAT supporters should explain why the same won't be true in America.
A VAT would not simply replace other taxes, since that would be too easy.
This would be in addition to the tax increases and new taxes imposed already by the Obama Administration, including expiration of the Bush tax cuts for high-earners, an increase in the dividends tax rate, an increase in the capital gains tax rate, and a total of 18 new taxes under the recently-passed health care bill.
Prepare to bend over and open up, Patriots. The VAT is coming. Maybe not this Congress, but it's coming... unless something in Washington seriously changes in 2010 and 2012.
