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Time to Pay the Piper? The First Hint of a European-Style VAT

Michael Reagan
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Making Sense, by Michael Reagan

Democrats in Washington haven’t wanted to be terribly forthcoming as to how they intend to pay for the new health care entitlement program and other massive spending programs being passed. It seems our national debt ceiling is now raised every few months, and the federal deficit is higher than it’s ever been — exponentially so.

taxes irs value-added tax vat
Cartoon by Daryl Cagle – msnbc.com (click to purchase)

Well, we can now see why the liberal establishment hasn’t wanted to address the issue head-on with the American people. At a private event the other evening, it has been reported that one of the Obama Administration’s lead economic counselors, Paul Volcker, indicated the support for a Value-Added Tax (VAT) may be more achievable than in the past.

This statement does not surprise me in the least. You see, in order to fund the record spending of the federal government, hard-working families and small businesses are going to be required to foot more of the bill. It is that simple. After passage of a nearly $1 trillion health care bill, the Obama administration cannot longer deny this. The only question in my mind has been how much will our taxes be raised — and when.

A VAT is a tax that is added to a good at each stage of the production process. So when a hypothetical widget’s first component is put together a tax is added. That’s just the start. At each further stage of assembly, development and distribution, a new tax is added, all the way through until final sale. Not surprisingly, VAT taxes are not borne wholly by the producers themselves. Rather those incremental taxes are passed along to consumers in the form of higher prices.

Even most troubling, this tax comes with a complete lack of transparency. Unlike a sales tax, which the consumer sees as a line item on their sales receipt beyond the retail price, a VAT is simply a hidden tax. It is another way for the federal government to take our money and deliberately leave taxpayers in the dark about their share of footing the bloated federal budget.

Now keep in mind, the addition of a VAT would be on top of our already overly burdensome federal tax system — meaning that you would continue to pay your federal income, payroll, capital gains, and estate taxes. Don’t be deceived into seeing this as a sister to the FairTax reform. This is an entirely new accounting which will significantly increase the price of every good you buy.

Some will argue that this unofficial statement by Mr. Volcker was merely just an administration official discussing possible new revenue streams with a friendly audience — not portending things to come. Not so. Things rarely happen from our leaders in Washington by accident. This was the first salvo in what many of us have feared — Democrats gearing up to increase our tax burden by creating a new form of federal taxation.

Those of us who believe that the federal government should learn to do its job with less money, just as the private sector is forced to do, must begin to prepare for this battle. We almost stopped the passage of health care reform despite little time to gear up a national effort in opposition. Short of a procedural maneuver, we would have succeeded.

Here, we have the advantage of time on our side and we must get ready to fight. Fight for smaller, smarter government; fight to keep more of our hard earned dollars; fight against yet another policy that moves us closer to the European Socialist model.

Join me at Reagan PAC at www.thereaganpac.com to join a grassroots force that will help lead the charge in keeping the VAT in Europe from being imported to our shores.

—–

Mike Reagan, the elder son of the late President Ronald Reagan, is spokesperson for The Reagan PAC (www.thereaganpac.com) and chairman and president of The Reagan Legacy Foundation (www.reaganlegacyfoundation.org). Look for Mike’s books and other information at www.Reagan.com. E-mail comments to [email protected].

©2010 Mike Reagan. If you’re not a paying subscriber to our service, you must contact us to print or Web post this column. Mike’s column is distributed exclusively by: Cagle Cartoons, Inc., newspaper syndicate. For info contact Cari Dawson Bartley. E-mail [email protected], (800) 696-7561.

Michael Reagan

Michael is the son of former President Ronald Reagan and Academy Award Winning Actress Jane Wyman.

Comments

12 responses to “Time to Pay the Piper? The First Hint of a European-Style VAT”

  1. Cal Avatar
    Cal

    Here's a novel concept. STOP SPENDING!

    Let me see if I'm getting this. Obama spends us into bankruptcy and now conveniently needs a new "revenue stream" to finish cleaning up the mess Bush left. A VAT is all we need to really put a damper on consumer spending and productivity. First shot across the bow? You betcha. The only way to pay for the "free stuff" is to tax the hard working people into oblivion. Some 47% of Americans don't pay a single dollar in federal income tax but rather than ask them to do their fair share the first proposal on the table (yes, I know it isn't official administration policy–just a "great" idea for them to "study.") That way, we can bring down the standard of living for ALL Americans and continue to pour money down rat holes like stimulus and health care deform. No big deal.

    Here's some excellent commentary on the CBO's charts of Obama's projected deficit spending through through 2020. Remember he told us he'd "reduce his deficits by half by 2013." That's still FAR above Bush's largest deficit ever.

    "We won’t be able to bring down this deficit overnight, given that the recovery is still taking hold and families across the country still need help. … Just as it would be a terrible mistake to borrow against our children’s future to pay our way today, it would be equally wrong to neglect their future by failing to invest in areas that will determine our economic success in this new century." Obama's quote.

    But not only does President Obama’s budget fail to reduce deficits “overnight”, his budget actually moves them in the opposite direction. President Obama’s budget would:

    * Permanently expand the federal government by nearly 3 percent of gross domestic product (GDP) over 2007 pre-recession levels;

    * Borrow 42 cents for each dollar spent in 2010;

    * Leave permanent deficits that top $1 trillion in as late as 2020;

    The chart above compares the President’s budget deficit projections to the Congressional Budget Office’s budget deficit projections under current law. In other words, the policy changes embodied in President Obama’s 2011 Budget puts our country $2.5 trillion deeper in debt by 2020 than it other wise would be if current law were left unchanged.

    Now the President is apparently arguing that his trillions of dollars in additional deficit spending are needed to “invest in areas that will determine our economic success in this new century.”

    This is statement goes to the core of the fundamental difference between leftists and conservatives in this country: liberals belief economic growth comes from wise investments by government experts; conservatives believe that economic growth stems from millions of Americans having the freedom to make their own economic decisions everyday.

    President Obama’s bailouts, massive stimulus spending, and other dangerous interventionist policies (some of which began in 2008) have made Americans less economically free. The 2010 Index of Economic Freedom analyzes just how economically “free” a country is, and this year America saw a steep and significant decline, enough to make it drop altogether from the “free” category, the first time this has happened in the 16 years we’ve been publishing these indexes. The United States dropped to “mostly free.” As the Index shows, lack of freedom has a direct, negative effect on job growth. It should be no surprise that President Obama’s policies have taken us down the path to fewer jobs and record deficits." End commentary.

    Great idea. Is the next plan to make French the national language?

    Reply
  2. Another Bored Canadi Avatar
    Another Bored Canadi

    I'm a little confused. "We almost stopped the passage of health care reform despite little time to gear up a national effort in opposition. Short of a procedural maneuver, we would have succeeded." Didn't the healthcare debate go on for about a year? Didn't the Senate and Congress vote on the bill?

    Reply
  3. geoff Avatar
    geoff

    "The chart above compares…." So Cal is freeloading – or plagiarising. or… cut & pasting again without bothering to think (!) about what it is he's copied. Doesn't even bother to cite his source. It's only "theft" when others do, it right?

    I've always found the VAT easier to comprehend than the stupid sales tax anyway: you go into a store, pay the price on the label. Period. Rather than going somewhere and having to do some quick calculations to try to figure out what the real price is above & beyond what it says on the sticker. I would have thought that those as mentally challenged as Mr. Cal would have seen that as a bonus, but no…

    Reply
  4. geoff Avatar
    geoff

    "STOP SPENDING! "

    Why does Cal hate America? why does he want to ruin its fragile economy even further? Spending is about the only thing that keeps it running. That was why Greenspan & Co. were so keen on getting everyone and his dog to buy houses they couldn't afford on credit: inflate that bubble, baby: create an artificial demand…

    But then, yeah: we've seen how little Cal understands of economics and, well… just about everything else.

    Reply
  5. John D. Hooper Avatar
    John D. Hooper

    Um…..WHAT "chart above", Cal?

    Reply
  6. Jack Sprat Avatar
    Jack Sprat

    "Um…..WHAT “chart above”, Cal?"

    I believe you may find it here, hench the "quotation marks of his cite"

    http://www.heritage.org/Research/Reports/2009/03/…

    Reply
  7. Jack Sprat Avatar
    Jack Sprat

    "Comment from Another Bored Canadian

    Time April 8, 2010 at 3:39 pm

    I’m a little confused."

    Don't really blame you, I'd also be bored and confused if I tried to poke my business in to Canada’s, but honest confusion would come from the fact that the process was quite messy by design of the Dem's particularly our Comrade president, not only has there been a "new" HC bill at every vote, but the Dem congress apparently didn't or couldn't read the multitudes of bills, even the Law Professor in chief said he didn't know what was in the bill (or versions of the bill) he supposedly "read". Compounding that was the attempt by the "ruling party" to exclude the "opposition" from the process. The bill that was voted on wasn’t the final bill and the Dem’s use the smoke screen to try to save the seats of those who are trying to run for re-election as opposed to those who know they won’t stand a chance because of the real animosity of this bill, and one of the reasons for the 2014 provisions of the bill since BO really want’s his regime to rule for another term, I don’t think so.

    Yes, Americans wanted health care reform, but like much of the Canadian and other systems, our MA care is a complete failure after 4 years, with the Federal government propping up the failed system, even the liberals in MA, know this, they also know that the “universal” state system is “the hole in the budget blow” by some $400 million and 6% are still not covered. Americans will not just look the other way, like many other countries have, it will become apparent.

    What this boils down to is that Americans are for now stuck paying for a prized pig we didn't want, in part because the ruling class didn't want us to be outraged. 20 States on whom the large part of the fiscal burden will fall are in the process of suing to get a ruling of the HC provisions as being unconstitutional, much like Quebec and their provisions, only on a wider scope, they have a good case. The political effect will be "no jobs" and a judicial sideshow trying to keep our Supreme court from going toward the left side of the cliff. The real change will be when the real feelings of Americans boot the Democrats out in November and "turn back the clock", repeal, isn't as probable as "defunding" and making the bill less about the government's assumption of power, and more about affordable health care for those who need it. In American you can't force someone to buy something they don't want to make it cheaper for you and get worse care for them. We don't see that as a very humane action.

    Unfortunately, jobs and the war on terror were 1 and 2 when comrade president was elected, and still are, Americans are going to be rather unforgiving for the loss and continued apparent unconcern about jobs in Nov. We allow our presidents a certain amount of OJT, but not when we see him “fundamentally transforming” America into a third world country.

    Thank you ever so much for visiting, at least you aren’t generally rude. Have a great day and smile : )

    Reply
  8. Cal Avatar
    Cal

    What chart above? Did you miss the line that reads, “Here’s some excellent commentary on the CBO’s charts of Obama’s projected deficit spending through through 2020.” Since charts don’t post on Cagle, it’s kinda tough to post them. The non-Scarecrow types have no problem figuring that out.

    I noted this was “commentary” and put it in quotes to separate it from my part of the post. If your interest really was with “the chart” and not just whiny nitpicking, I’d post the link although Jack’s has the same info and “the chart.” But I have little doubt “the chart” itself is of much interest to you. If you like charts, here are several to show how deep in debt we are and how much deeper we’ll be thanks to Pelosi/Reid/Obama. It’s just swell, Beav.

    http://chartingtheeconomy.com/?cat=7

    And, no the “debate” didn’t go on for over a year. What went on was Democrats telling Republicans “NO!” every time they offered an alternative. In fact, it got to the point that Democrats went into seclusion behind closed doors with the press or a single Republican in any meetings for weeks as they “worked out the details” of the bill and how to ram it through. It was the exact opposite kind of object lesson you’d want to use for a civics class showing high school kids how the democratic process works. Or in this case, how the Democrats used total, 100% partisanship to defeat the bipartisanship of every Republican and 34 Democrats and a majority of the American public. Too bad Bush and The Republicans didn’t do the same thing with Social Security which is now taking in less money than it pays out six years ahead of projections. Thanks, guys! Keep up the spending. It’s working just super!

    And, yes, gooff, Mr. Marine does so hate America. Well said! As leader of the loon brigade, I’d expect no less from you. Do they just give away professorships in Canada or did you find yours as a prize in a box of Cracker Jacks? I can’t wait until our entire health care system is as swell as the one in Massachusetts. Then we’ll finally be just like Canada and you’ll have one less thing to be envious of. But where will your ministers go when they need something important done in a hurry? I guess they can “die early” like we will. Thanks, Rep Grayson! I hope you enjoyed your one and only term in congress. Maybe you’ll have the time to seek the psychiatric care you so desperately need once you get sent back to Orlanda. I hear there's a hungry whale their who likes chunky blowhards. (That is, if gooff hasn’t taken up all of the available appointments.) Must be Spring break to have so much time to post here so often…

    Did anyone see Grayson intentionally walk in on a Republican meeting at a Perkins Family restaurant? He accused them of “spying” on him. That guy is totally unhinged and likely deranged.

    Reply
  9. CarlE Avatar
    CarlE

    “this unofficial statement by Mr. Volcker was merely just an administration official discussing possible new revenue streams with a friendly audience… This was the first salvo in what many of us have feared “. This says it all. The fear mongers of the right see everything as portending democrats attempting a socialist takeover! FEAR, FEAR the socialist are coming! And of course he ends with, “Join me at Reagan PAC”(send me money).

    Cal “writes”, “The chart above compares the President’s budget deficit projections to the Congressional Budget Office’s budget deficit projections under current law.” I didn’t see any chart above. That combined with well phrased sentences is enough to assure us once again that Cal is plagiarizing. Probably a right wing blog as usual. He tries to excuse himself with the lame excuse that he said it was commentary. When you don’t attribute the source you are stealing someone else’s work. That’s what plagiarizing is BDA. Citing sources is fine. Providing links is fine. Copying someone else’s work and representing it as your own is not. You should have cited your source and made it clear. Your lame excuse is just that. Of course, Jack excuses you. He even cites your source for you. Doesn’t make you any less of a fraud.

    What's even 'richer' is his claiming that the dems are the party of no! Yeah, right. Try convincing anyone other than yourself of that.

    So what's next? filibustering the financial regulatory reform and then only the second time in history for filibustering a Supreme Court nominee. And yet cal will probably try again to lable the dems as the party of no.

    Reply
  10. geoff Avatar
    geoff

    "What chart above? Did you miss the line that reads, “Here’s some excellent commentary on the CBO’s charts of Obama’s projected deficit spending through through 2020.” Since charts don’t post on Cagle, it’s kinda tough to post them. The non-Scarecrow types have no problem figuring that out."

    LOL, Cal. Cut & pasted & didn't even read it beforehand.

    LOL.

    Reply
  11. Cal Avatar
    Cal

    CarlE. As usual, you have absolutely zero to offer. In addition to not being able to read a clear and simple explanation for your misdirected "point", you offer not so much as a thought; nothing that disputes anything Reagan or I said. It’s just more envy-commentary from a guy who can’t write his way out of a paper bag directed toward someone who can. You can’t debate content so you fish around for anything on process you think will make you look smarter. You must think it works because you keep going to that same old dry well looking for something. It’s empty, CarlE. It’s dried up. Just like your writing and debating skills. But your are a persistent fellow. I'll give you that.

    Grow up, please. And then run down to K-Mart and pick up a life while you’re at it. They’re on Blue Light special this week only. And do us all a favor and take a short course in creative writing. That way you may just learn how to write well enough to clearly lay out a thought, provide support for it, and not convolute thoughts on other subjects to make the muddled points you often make. We’d appreciate that very much.

    Reply
  12. geoff Avatar
    geoff

    How pathetic can you get? Cal's "same old dry well" of lame insults, no content. In his own words, "absolutely zero to offer."

    Gee, I guess we can't really argue with that "chart above" seeing as it wasn't there. Besides the invisible chart and insults, what else is there to "dispute"?

    But this is a classic: "That way you may just learn how to write well enough to clearly lay out a thought, provide support for it, and not convolute thoughts on other subjects to make the muddled points you often make." I mean: write a long, convoluted, muddled sentence telling someone not to write long, convoluted, muddled sentences.

    You can't make this stuff up.What with Phil's wierdness & Cal's hypocrisy, the cartoonists will really have to work hard to anything so funny.

    Reply

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