15 April 2010


Nancy Pelosi and other liberals are mulling over imposing a VAT (Value Added Tax) on America to cover the unsustainable deficits they have run up as well as ambitious new social spending programs. This tax is common in Europe, where it ranges as high as 21%. It is in effect a national sales tax that is applied at each stage of production. The imposition of such a tax would provide the government with a new stream of revenue that would be invisible.

Given the proclivities of the current government you can expect things to cost a lot more in the future. Either they will impose a VAT, or otherwise will inflate the currency to devalue debt and screw the bondholders, causing everything to cost more. Anyone who remembers the nightmare of the late 70s inflation must already be concerned about this.

The Left essentially wants to emulate the European welfare states, and so would adapt their methods, beginning with health care. But when it comes to the VAT America is different. There are states and local governments that also tax, but they are conveniently usually left out of comparisons with other countries. We already pay state and local sales taxes as high as 10% in some localities. Will we now pay another federal sales tax? The VAT would result in an endless expansion of government if the Social Democrats have their way. This will come at the expense of the private economy, which will result in slower growth and fewer jobs.

Under this proposal you will find yourself with less money in your pocket while looking at higher prices for everyday expenses. On this Tax Day it is time to say enough! The only hope is that in November these scoundrels will be voted out and replaced by fiscailly prudent representatives.

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