Democrats Look At National Sales Tax
May 27, 2009 Political
The Democrats never met a tax they didn’t hike and in these times of excessive spending and out of control government they need to find a new revenue source which is nothing more than a euphemism for taxes. Barack Obama vowed that 95% of us would not see a tax increase, not a dime. Then they raised tobacco taxes. One can debate the evil of tobacco use and whether people quitting is a good thing but the reality is that this was a tax increase mostly on those he said would not pay more.
There are many schemes in the works that will raise taxes of all the people he promised would not see a tax increase. The Cap and Trade will raise the cost of people’s energy because the tax increase to the businesses will be passed down to the consumers. There will be an increase in the gasoline tax or a mileage tax. And Obama is considering taxing the health care benefit provided by some employers. Astute political observers will note that this is the plan John McCain had and that Obama vehemently opposed. He said his plan was better. Looks like he does not think so now. For the record, I am opposed to the idea no matter whose it is.
There is a tax on the table that will certainly cost everyone and that includes the poorest of the poor. This is a national sales tax or a value added tax (VAT).
A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American — a tangible benefit that would be highly valuable to low-income families. Washington Post
The article discusses a number of interesting things. Rahm Emanuel’s brother is consulting on this and an admission that Obama’s plan to increase taxes on the rich will NOT pay for what he wants.
He likes the idea of the VAT if they can figure a way for him to keep his promise. I don’t know how one would do that. People who sell goods have no idea how much a person makes so how could the determine who pays it and who does not?
The VAT is a terrible idea. The proponents of it claim that a 10% tax would be wonderful and result in fewer people paying income taxes and a 25% VAT would give them all they want. Of course that means for every $100 you spend on something there will be a tax of $25. A $30,000 car will cost an additional $7,500 to the consumer
The other problem is that government never gets rid of a tax. There will be the VAT and income taxes. The VAT might bring in a lot of money and they will want more so they will raise the percentage they take. It will be a mess and everyone will end up paying despite what Obama promised.
I do not think adding another tax is the answer to our problems. We need to get a handle on out of control spending and we need to limit government. We also need to revamp the tax code so that everyone pays a flat rate on income. The idea that Congress can keep spending and then show up with its hand out looking for more of our money is getting old.
But hold onto your hats because this will be on the table along with a number of other taxes. Obama promised not to tax 95% of the people but that will not happen and many people will be paying more in taxes.
It is absolutely impossible to pay for all this spending without taxing far more people than he promised when he wanted to be in the White House.
Now that he is there it is a different story. Bill Clinton did the same thing.
Some people never learn.
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