Right on cue, Charles Krauthammer has written an article on the Value Added Tax (VAT). Selling people an entitlement is much easier than a massive tax increase. As I’ve stated before, Europe had a lot more flexibility with their budges because the United States was providing defense during the Cold War. Things just aren’t as simple in the United States.
Obama set out to be a consequential president, one on the order of Ronald Reagan. With the VAT, Obama’s triumph will be complete. He will have succeeded in reversing Reaganism. Liberals have long complained that Reagan’s strategy was to starve the (governmental) beast in order to shrink it: First, cut taxes; then, ultimately, you have to reduce government spending.
Obama’s strategy is exactly the opposite: Expand the beast, and then feed it. Spend first — which then forces taxation. Now, with the institution of universal health care, we are becoming the full entitlement state and the beast will have to be fed. The VAT is the only money tree in creation that’s large enough.
Americans are desperately in need of honest and adult leadership. President Obama is just trying to increase the welfare state. He’s framed the entire health care debate dishonestly. ObamaCare isn’t deficit neutral and the way that the White House and the Democrats in Congress cooked the books for the CBO is just disgraceful.
I’m just not sure Americans are ready to hear the truth. We can’t afford these programs. It would be nice if we could make things better by nationalizing health care, automobile manufacturers, and student loans. The truth is we can’t have it all, but no one has the guts to tell the American people.
It’s time to put ObamaCare behind me and safely on the dusty back shelf I call my cerebral cortex. There are plenty of battles ahead, but other issues loom on the horizon, like the ever-controversial kickball postseason. The Democrats are busy giving themselves high fives and Tom Harkin is promising to add the public option in next year’s budget. Even under the rosiest scenario there are going to be less Democrats in Washington this time next year.
The problem Democrats have is that they just passed a massively unpopular bill and they don’t have anything they can offer the American people that’s popular. I guess they could try to pass the climate change bill (a.k.a., cap and trade), but that’s probably hung up forever in the Senate. They could tackle the immigration issue. However, the Democrats are in favor of amnesty, which is another unpopular topic. What about the Value Added Tax (VAT)? Mmmmmmmmm. That sounds good!
One pundit who has been absolutely outstanding in his predictive powers over the past year is Charles Krauthammer. He predicted early on that ObamaCare would pass and he never wavered, even in January after Brown’s election. Krauthammer believes that a national sales tax in inevitable.
I’m not exactly sure how the President is going to make this case to the American people. Passing a Utopian entitlement is easy. Passing a massive tax increase during a severe recession won’t be very popular. What happens if the Supreme Court strikes down ObamaCare? There’s a chance the individual mandate will be declared unconstitutional. Unless there’s a massive economic boom in the next six months things are likely to get worse for Obama and the Democrats.
The Washington Post has an article today on the value-added tax (VAT). Some Democrats are considering the sales tax as a way to pay for the expanding costs of social programs. Everyone realizes we’re currently on a course to bankruptcy; however, it’s going to be a difficult to create a national sales tax without taking a beating at the polls.
The fascinating part of the article is that it’s not even a consideration that perhaps the government shouldn’t be in the health care business. No state has been able to create a long-term viable health care system. European states are already taxing their citizens to death and the health care is expensive, slow, and poor. It should also be noted that much of Europe has had the benefit of not having to pay for defense. In many ways Europe has had perfect conditions for fantastic health care and it’s still a failure. Despite these facts, Ezekiel Emanuel, the brother of White House chief of staff Rahm Emanuel, has written a book titled “Health Care, Guaranteed.” Emanuel argues that we can pay for this utopian dream by taxing the crap out of people.
What would it cost? Emanuel argues in his book that a 10 percent VAT would pay for every American not entitled to Medicare or Medicaid to enroll in a health plan with no deductibles and minimal copayments. In his 2008 book, “100 Million Unnecessary Returns,” Yale law professor Michael J. Graetz estimates that a VAT of 10 to 14 percent would raise enough money to exempt families earning less than $100,000 — about 90 percent of households — from the income tax and would lower rates for everyone else.
Does this sound too good to be true? Of course it does; this is complete nonsense. An argument could be made that some of the more conservative states with lower taxes could absorb the new sales taxes, but what about all those states in the North? People are already leaving in droves, and a national sales tax would make the economic climate in those states even worse.
I don’t see how anyone could sell the VAT tax without getting rid of the income tax. It seems as if this the author of this particular article is more worried about all the people who aren’t paying (income) taxes. Soaking the rich and burdening corporations with higher taxes (oh, btw, corporate taxes are passed on to consumers) isn’t going to be good for the economy. I’m all for a simpler tax system, but we can’t continue to penalize people for being successful. Democrats are slowly morphing from the party of the have-nots to the party of hand-outs.
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