Get Ready for the Value Added Tax
ByWhile on the subject of new taxes for those making less than $250K per year, a value added tax (VAT) will be an invisible tax on each and every citizen in the United States. The Obama administration and their cohorts in Congress are printing and spending money like there’s no tomorrow. Roger Altman (a former Clinton administration official) predicts the VAT will be necessary next year. (No doubt, after mid-term elections.) In fact, Mr. Altman is in favor of the VAT.
Mr. Obama and his economic advisers understand this deficit outlook and undoubtedly view it as unsustainable. They also understand that increasing deficit concerns complicate their efforts toward universal health-insurance legislation, which is clearly a top priority of this administration. According to the Congressional Budget Office, which released its latest forecast June 16, such legislation would mandate more than $1 trillion of new federal spending over 10 years. Winning support for that much new spending — in the face of record deficits — will be a challenge.
This explains why the president is stressing the importance of a deficit-neutral bill. In other words, that any new spending be fully offset by a combination of Medicare and Medicaid cuts and new tax revenues. Key Senate leaders have echoed this requirement. Fully financed legislation probably will emerge after a lengthy struggle. …
We all know the recent and bitter history of tax struggles in Washington, let alone Mr. Obama’s pledge to exempt those earning less than $250,000 from higher income taxes. This suggests that, possibly next year, Congress will seriously consider a value-added tax (VAT). A bipartisan deficit reduction commission, structured like the one on Social Security headed by Alan Greenspan in 1982, may be necessary to create sufficient support for a VAT or other new taxes.
This challenge may be the toughest one Mr. Obama faces in his first term. Fortunately, the new president is enormously gifted. That’s important, because it is no longer a matter of whether tax revenues must increase, but how.
There you have it. Our enormously gifted president is going to start selling a tax increase to the American people. Have no doubt, he’ll promise that the tax is only for the polluters and profit makers, but in reality it will be a tax on every American and will hit the poor the hardest.
Politicians can tell you what you want to hear all day long. But they aren’t magicians and there is no possible way they can provide something for nothing. We’re already seeing a repeat of the 1930’s because we’re copying the policies of the 1930’s. It took a world war to get us out of that mess. What’s it going to take to get us out of this one?
Popularity: 5% [?]
Be prepared for peeps to STOP SHOPPING (= lost jobs) and the birth of a vibrant black market.
This only makes China stonger.
Hey! Isn’t Manchuria in China….Hmmmmm.
Makes one wonder doesn’t it?
The key to imposing new taxes and remaining “popular” is core to your point – it must be hidden or veiled. For instance, I took to calculating my Qwest landline bill – 57% was taxes. I dropped it, but most people just write a check. We won’t see all these taxes, we’ll just be poorer at the end of the year and wonder why. And let’s not even talk about those cap and trade taxes coming…oye
When I read a similar article in today’s WSJ about the likelihood of a VAT tax around the corner, it almost came off as a teaser to get a read on how the press and readers would react. There has never been any doubt that the Obama administration will eventually get to some serious taxing legislation. But, by next year the citizenry will be sufficiently beaten down with all the non-stope “hope and change” taking place. What I am most concerned about however, is that a VAT tax will not be enough to satiate the federal government’s zeal for spending money. When Obama’s administration turns its gaze upon the social security debacle, the possibility of seeing the feds confiscating all the 401Ks to deposit in a retirement account controlled by the feds will not be too far fetched. Such a scenario may never have seemed possible a year ago but after the last few months, it doesn’t look nearly as impossible.