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Welfare state will demand a new VAT tax

Nolan Finley
Detroit News
Thursday, April 22, 2010

Pay attention to the growing chatter about a value added tax. It’s how we’ll likely pay for our new health care entitlement, and the vehicle that will turn America into a colony of worker bees sweating and slaving to sustain Queen Government.

Having joined the league of welfare nations, we must now adopt a European-style tax structure to pay for it. How they do it in those industrialized nations we so envied for their “free” health care is the value added tax, or VAT. It’s a national sales tax on all goods and services consumed.

Paul Volker, President Barack Obama’s economic adviser, declared the VAT is no longer a “toxic idea” for attacking America’s soaring deficits. That brought the VAT storming out of the closet. House Speaker Nancy Pelosi is giddy in espousing its virtues. Senate Budget Committee Chairman Kent Conrad, D-North Dakota, declares it “must be on the table.” And the White House deficit reduction panel says the VAT is under serious discussion.

Such cheerleading makes it hard to dismiss the prospects for an additional tax on every piece of the economy to pay for programs that will create a budget deficit the people who passed the programs now say is unsustainable.

And they’re right. America can’t sustain this level of debt. In 2009, the shortfall came in at $1.4 trillion. The White House projects continued deficits of $1 trillion a year for the next decade. That assumes the shaky scheme Obama crafted to pay for health care actually holds up, a bet only a fool would make.

Obama promised to balance the budget on the backs of the wealthy, and he’s trying. The new taxes he’ll impose on high income earners will drain them of up to 60 percent of their earnings, by the time all federal, state and local levies are paid. But even if the remaining 30 percent is confiscated, it won’t be enough to erase the deficit or pay off the national debt, growing toward $14 trillion.

Full story here.

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