A Little ‘VAT’ Tax Among US Friends; Recipe for Disaster?

What’s a little tax among friends? You and I don’t mind paying more taxes, as long as the government pays for more services, right?

Well, that’s what Pres. Barack Obama and the Democratic majority seem to think, but I’m not buying that argument. I don’t think you buy it, either. 

How do you think everyone will like paying a VAT, a 10% national sales tax? Yes, the VAT (Value-Added Tax; what a misnomer) would add a 10% tax on everything, from groceries to haircuts, from furniture to paying to get your taxes done. Ironically, Ezekiel Emanuel has been hired by White House Budget Director Peter Orszag to advise him on health care. Ezekiel is a VAT advocate and published author on health care. And yes, Ezekiel Emmanuel is the brother of Rahm Emanuel, who is White House Chief of Staff. Very cozy. Oh, but that’s not all.

How do you think people will like paying a sin tax on alcohol? The Democrats are couching this as a good thing; perhaps their thought process is consuming too much alcohol may lead to alcoholism. So Joe Smith, who likes to buy a case of beer a week, would have to pay almost $2 more for his case of beer. And those who like to indulge in a bottle of wine or two will pay even more tax; 49 cents per bottle, under the proposal being considered by the Senate Finance Committee. Taxes on sugary drinks, but not diet drinks, are also in the proposal.

So, let’s look at how things stand now. Obama has tripled the U.S. debt since he took office. The IRS just reported tax revenue was down 34% since April 2008, which equates to a $138 billion loss in federal tax revenue.  Massive job losses and pay cuts suffered by many Americans equate to less U.S. federal revenue.

Obama’s answer is to hike taxes to make up for the budget shortfall and to pay for his very expensive Health Care Reform.

How high will Congress hike taxes to try to pay for Obama's runaway spending?

Problem? With additional taxes, people will have even less discretionary income. Not only that, but think of the impact to businesses across all spectrums that will be hit by a ‘Value-Added Tax.’ The prices of products and services will increase. Businesses won’t be happy, and neither will consumers. Combine that with inflation, since the Federal Reserve keeps printing money, and what do you have? Would you call it a recipe for disaster?

Do you think more taxes will help America get out of the debt Obama keeps piling on? Or do you think we should demand Obama and Congress start slashing the federal budget, just like we have to cut some or all luxuries from our household budget in tough times to make ends meet?