THE INTERNET TAX MORATORIUM EXPIRATION

COUNTDOWN

Tell the Senate
to Make the
Moratorium
Permanent.
Click Here to Sign the Petition Before It's Too Late.
00
DAYS
00
HOURS
00
MINUTES
00
SECONDS

Obama Floats VAT Tax<br> To Pay for Socialized Medicine


Posted by Ryan Ellis on Wednesday, May 27th, 2009, 11:41 AM PERMALINK


•    The Washington Post today reported that Democrats all over Washington and in the Obama White House are clamoring to include a value-added tax (VAT) to pay for a government-controlled national health insurance scheme.  The White House has even brought in Rahm Emanuel’s brother to consult on this.

•    This trial balloon is another attempt by President Obama to renege on his pledge to not raise taxes on any American making less than $250,000 per year—a promise he made repeatedly and forcefully on the campaign trail in 2008, and which he broke 16 days into his Administration

•    A VAT is a version of a national sales tax.  Any person who consumes pays this tax.  The poor and working class (and certainly those making less than $250,000 per year) consume more as a percentage of their income the less they make.  A VAT is among the most regressive tax schemes that can be imposed, and is a direct violation of Obama’s no-tax-hike promise

•    VATs are a gateway drug to more government spending.  When VATs first came on the scene in Western Europe in the 1960s, they were modest taxes averaging around 5 percent in rate.  In the years since, the rates have climbed to an average of 20 percent (with a 15 percent minimum to get into the European Union)

•    There are two reasons for this.  First, politicians are always tempted to hike the rate and exclude preferred items like food, medicine, and housing.  Second, because a VAT is embedded in the price of a good (unlike state sales taxes in the United States), most people are unaware of the tax or how high it is.  Raising the VAT rate becomes a relatively-painless political maneuver, especially if it’s linked to higher welfare spending or VAT base carve-outs

•    This VAT trial balloon betrays the mentality of the Pelosi-Reid-Obama thinking in Washington today.  Raise taxes, and raise federal spending.  Ultimately, they won’t be satisfied until federal taxes and federal spending are permanently at record levels.  A VAT is a good way to pay for bigger government, which is why the Europeans are so enamored with them

PDF version

More from Americans for Tax Reform

hidden