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Obama Plans for Taxes: Hold on to Your Wallets by Jeff Crouere, Posted April 11, 2010

This week, Obama economic adviser Paul Volcker admitted that a value added tax (VAT) may be needed to deal with the explosion of entitlement spending and the growing deficit. Volcker said that a VAT "was not as toxic an idea" as it was in the past. Only in the warped mind of an Obama administration official is a VAT acceptable.


A VAT is a tax on every stage of production of an item, including the final sale. It is like a national sales tax and is in place in many of the high tax Western European countries. Clearly, it is on the agenda for the Obama administration, despite the official denials. Some estimate that a VAT would bring in an extra $1 trillion in revenue for the federal government. These funds will be extracted from the wallets of suffering Americans and will surely lead to higher prices and less purchasing power for weary consumers. A VAT will create more economic misery for this country, limiting growth and the creation of jobs; however, it will succeed in growing government, the only real goal of this administration.


With the explosion of new spending and the $2.5 trillion healthcare bill, the Obama administration is rushing headlong into the type of socialism imposed in Western Europe. Since our country now has socialized medicine, it should surprise no one that a VAT, another component of socialism, is being considered.


Fortunately, this burdensome tax is still in the planning stages. If Republicans take control of Congress this fall, the GOP can stop such plans before they get implemented. Fighting this tax should be in the platform of every Republican candidate running for Congress in November of 2010.


This is no doubt that Americans do not want another costly and oppressive tax. In a horrible economy, the last thing this country needs is another tax, especially one as destructive as the VAT, which will be a tax on every American, not just those making over $250,000. Such an oppressive tax would break the campaign promise of President Obama who pledged that only the top five percent of Americans would experience any tax increases.


To this administration, paying more taxes is as American as apple pie. In the campaign, Joe Biden claimed that it was the "patriotic" duty of Americans to pay more to the federal government. A VAT is not patriotic; it is an obscene scheme to penalize Americans for productivity.


One of the worst features of this tax is that it can be increased at will by the federal government. With such a cash cow in place, if it is ever implemented, it will not be rescinded as the government will become addicted to the cash stream.


To make matter worse, Volcker also recommended a tax on carbon and energy as a method of reducing the deficit. According to Volcker, "If at the end of the day we need to raise taxes, we should raise taxes." Memo to Team Obama: we do not need to raise taxes on anyone.


Today, our total tax burden on the federal, state and local levels is too high. If the federal government needs more revenue, the best approach is to reduce income taxes. Tax cuts worked in the 1960's and 1980's and ushered in years of economic growth. In contrast, whenever this country embarks on a policy of higher taxes, economic misfortune results.


It is bad enough that the monstrosity of a healthcare plan increases taxes by billions, but a VAT would be a total economic disaster. Volcker's comments give us another disturbing insight into an administration, which is proving to be nothing more than a European style socialist regime. 

Other articles by Jeff Crouere

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