Friday, September 11, 2009

VAT is Coming to America

President Obama has said repeatedly that he will not raise taxes on families and businesses making less than $250,000. Of course the devil is in the details. It is estimated that Cap and Tax, that has been passed by the House of Representatives and awaits passage by the Senate, will cost the average family of four $3,000 or more in higher energy costs while making billions of dollars for companies like GE that owns NBC, the Never Been Correct television station. GE supports Cap and Tax because they stand to benefit from the sale of carbon credits as well as wind turbines that require government subsidies to be economically feasible. As a GE shareholder, I should be happy that GE will benefit from Obama's Socialist schemes particularly since Jeff Immelt, GE's current CEO has made a mess of GE; but as an American I know that Cap and Tax will cause hardship for many American families and even more job losses than what we have now in the worst economy since the Great Depression. Therefore, I cannot support Cap and Tax because it will do little to impact global warming and it will retard any economic recovery that might otherwise occur.

So is $3,000 in higher energy costs for the average family of four a tax? By any reasonable standard, this is a tax, yet President Obama who is not too good when it comes to telling the truth can say that he has not raised taxes on people making less than $250,000 a year. Next, the Democrat Socialists that control Congress and the President will propose a Value Added Tax (VAT) which would be a national sales tax. They will do this because the trillion dollar deficits are not sustainable and the Democrat Socialists are simply incapable of cutting spending. For anyone who has traveled to Europe, it should be no surprise that the French invented the VAT in 1954 and that today the VAT represents 52% of their government revenues and they still have other high taxes. The VAT sales tax around the world ranges from 15% - 25% and it is charged on the purchase of nearly all goods and services. In our case, this would be in addition to state sales taxes. Businesses are often able to recover the VAT though a convoluted system and major administrative costs; though it often takes 3 - 6 months to get the tax back if at all.

In the past Democrat Socialists opposed a VAT for the United States because sales tax is the most regressive of taxes hitting their Peeps the hardest. But that was until the Democrat Socialists discovered the Earned Income Tax Credit which today provides the working poor, that pay no income taxes at all, an annual check to motivate them to continue working rather than go on welfare. The Earned Income Tax Credit actually is welfare. What the Democrat Socialists will do is simply provide this annual payment to people at higher income levels perhaps families earning $75,000 or less. They will do this to protect them from Cap and Tax and the VAT. Most important, the President and the Democrat Socialists that control Congress will expand the use of the Earned Income Tax Credit to put more people on the dole to buy votes. This is what happens today in Europe. Democrat Socialists want as many people as possible on welfare dependent on the federal government because it is the new slavery and government is the plantation.

Republicans will support a VAT because they see it as a substitute for income taxes, however, we will end up with both a high VAT and high income taxes. So, if any politician of either political party begins talking about enacting a VAT, no matter how small initially, it is time to take to the streets in more Tea Bag Protests. We have to help our elected representatives see the light or feel the heat. Otherwise, there is always the pitch forks and the tar and feathers which might work too.

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