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  • Reject the Value-Added Tax, Rein in Spending Instead

    The Washington Post today ran an article on the possibility of lawmakers enacting a value-added tax (VAT) to pay for soaring government spending. A VAT is basically a national sales tax, and the possible 25 percent tax rate floated in the article would raise the cost of virtually all goods and services by 25 percent. It would devastate families and businesses, kill jobs, and hammer the economy.

    VAT proponents take continued runaway spending for granted, leaving only the issue of how to extract the necessary tax dollars from working Americans. Nonsense. Real federal spending remained steady at $21,000 per household throughout the 1980s and 1990s, before President Bush hiked it to $25,000 per household. Now, President Obama has a proposed a budget that would permanently spend a staggering $32,000 per household annually – and that’s before all the baby boomers retire and add another $10,000 per household in Social Security, Medicare, and Medicare costs to the bottom line.

    So the problem is not declining revenues, but rather a spending spree unlike any in American history. If Washington insists on spending $32,000 per household, it will have to tax $32,000 per household – an unaffordable and unfair tax burden regardless what kind of tax collects it.

    Rather than tax America into permanent economic stagnation, President Obama and Congress must rein in runaway federal spending. Simply bringing real federal spending back to the $21,000 per household average that prevailed in the 1980s and 1990s would balance the budget by 2012 without raising a single tax on anyone. Even returning spending to the pre-recession level of 20 percent of GDP would eliminate two-thirds of the projected 2019 budget deficit without raising taxes.

    How can this be done? First, stop digging: no more unaffordable government expansions. Then, grab the low-hanging fruit, such as $17 billion spent annually on earmarks, $25 billion spent on unused federal property, and $123 billion spent on programs for which government auditors can find no evidence of success.

    Next, lawmakers should implement larger reforms: Require that the president’s $17 billion in “budget cuts” go towards deficit reduction rather than new spending. Rescind all remaining unspent “stimulus” dollars after the recession ends. Eliminate farm subsidies for large and profitable agribusinesses, which actually worsen the farm economy, and other forms of corporate welfare. Devolve functions like highways, economic development, education, housing, and antipoverty programs to state and local governments that are closest to the people. This would eliminate the expensive Washington middleman.

    Finally, lawmakers must address the unsustainable growth of Social Security and Medicare. A logical place to start would be inflation-indexing Social Security benefits for upper-income seniors, and to stop over-subsidizing the Medicare B and D premiums for upper-income seniors.

    The United States finds itself at a crossroads. Lawmakers can push spending – and taxes – to $32,000 per household, thereby burying families, businesses, and the economy in a painful European-style economic hole, or they can make the difficult but necessary decisions to return the size of government to its 1980s and 1990s level. Instead of asking how they can best tax Americans, lawmakers should take responsibility for the escalating spending trends that have put the nation in this difficult position.

    Posted in Ongoing Priorities [slideshow_deploy]

    29 Responses to Reject the Value-Added Tax, Rein in Spending Instead

    1. Spiritof76, New Hamp says:

      I agree that spending is THE PROBLEM at every level of government. Look at California for example. The spending had doubled since Wilson administration.

      We must repeal the 16th and 17th Amendments. The federal government must be forced to close Department Energy, Agriculture Department and Education. The government must get out of Social Security, Medicare and any other socialized programs. Close out ALL subsidies. Reform labor laws so that freedom to work without union thuggery at work place is assured. Enforce all laws concerning illegal immigration while eliminating welfare payments. Most of all, get rid of Federal Reserve, nationalized banks and auto companies.

      All those things will not happen until people in this country is made to face the reality of no food to eat. Until then, Americans will follow like a herd of cows to a slaughter house.

    2. Deborah Janecek, Pa says:

      i agree but what do I do. I have Specter and Kanjorski. Call and leave voice mails? i have and its always full and they cant take any more.

    3. CO Defender says:

      Don't worry–2010 will be a repeat of 1994. The Executive and Legislative branches have misinterpreted the will of the people and have already overreached farther than anyone would have predicted six months ago. Come 2010, Obama is a lame duck, and then we can get back on track, God willing.

    4. garythebuyer says:

      It is simple for the fiscal conservative. Spend less, tax less (lower Corporate taxes down to 15%), this will be an incentive for businesses grow their businesses in the US. The government needs to get of bed with UAW, GM, Chrysler, and the Banks. The government needs to stop meddling in the affairs of private citizens. Once these things are done, Americans will begin to have confidence and start creating jobs, which is the secret to the success. We are a comsumer driven economy, people need to be making money and spending it to move and grow the economy. It's pretty simple. Obama and Geithner are making to complicated.

    5. Barb -mn says:

      Why? Why would any member of American government let alone the majority, bring themselves down so low to avoid the benefits to humankind this country had to offer, Along with avoidance to the realization that every life is born free. America, with established resources, rules and laws, enabled that freedom for lifes time to all people, equally. The government has and continues to steal until we have no more to be stolen and government is in full control. Violations of the constitution and ethics has to be reprimand. They're thieves and murderous causes of the death of America.

    6. Sherill Calhoun, CA says:

      Communicating with our elected officials is a major obstacle. The TEA Parties represent a collective voice, but there is no excuse for politicians to forego listening to or responding to the very people they are in the business of representing. Oh, I am sure that they listen to special interest groups…unions…and although that's who may have financially supported their election, it is not who they are constitutionally obligated to serve. I think voters need to continue to "educate" elected officials about some very fundamental issues…the challenge will be finding the most effective way to go about that.

    7. Mark N, Indiana says:

      Spending is the problem and the 2010 election is the time to regain control over spending. It will take new congressmen to change spending in the federal government because Congress is the only branch with the Constitutional authority to tax and spend.

      The problem is representatives don't get elected for not creating programs for the home district unless voters decide they want more money in their pockets. Right now neither party has shown they will listen to voters so we must put in people that know we control their jobs. Re-electing the incumbents just lets them feel like the job is theirs and not our job that we give them. Push your family and friends to get out and vote in the next Congressional election and lets bring in real change.

    8. Jean G, Massachusett says:

      I know the VAT has been mentioned publicly before. The question that comes to mind is "Is this instead of or in addition to the federal income tax?"

      From where I stand, if it is instead of then all, even tax evaders, would be paying taxes. But a problem does arise when more taxes are "WANTED", then the sales tax would probably go up.

      If it is in addition to, then you know my opinion on that–NO.

    9. Sharon Fitzgibbons, says:

      I agree that spending or simply printing more worthless money is the major problem. This country is in grave danger of bankruptcy. I feel totally helpless. I live in the single party state of MA. All of my contacts with the state reps. are ignored. The DEMS are in lock step with this administration and completely ignore any opposing points of view or alternative plans.

      Hopefully, 2010 will remove some of the dead wood and the country can begin to recover, if it is not too late.

    10. Jack Lohman says:

      Better that we eliminate the cash dollars that are paid out to the special interests that fund the elections, and use that booty to fund public needs instead. Public funding of campaigns, costing just $5 per taxpayer, would be a bargain a hundred times over.

      Jack Lohman
      http://MoneyedPoliticians.net

    11. Ben C, Ann Arbor, MI says:

      As I see it the problem is Obama's fundamental personality and core beliefs. His personna is to be the center of attention and be perceived as a saviour. What doe he care about the implications of his spending? Regardless he will be gone in eight years (term limtis) long before the piper needs to be paid. He see's himself only on the short term and not the long term. He clearly enjoys the crowds and public speaking. A terrific teleprompter reader. Classic narcissism. The change we got is terrifying.

    12. MaryAnn, USA says:

      Jean G.-

      VAT would be in addition to the federal tax.

    13. European Conservativ says:

      Could you, please, describe this "painful European-style economic sinkhole" and what exactly do you mean by that, as compared to the United States?

      Maybe if the U.S. was able to collect more taxes AND SPEND THEM WELL (i.e. not on fradulent military contracts and botched foreign interventions), U.S. public infrastructure (from roads and bridges to public transport, schools and children playgrounds) could be somewhat elevated from its current Third World-like state and could at least approach in quality the infrastructure of the "painful European-style sinkhole". Think about it.

    14. Truth Hurts, The Rea says:

      Is it possible to inslave a democracy by taxation and regulation?We will see!It's time to read our Consitution,Bill of Rights and Declarition of Independence and restate our forefarthers ideals to our elected government and throw out the bums who don't resent those standards!!!!

    15. Pingback: Reject the Value-Added Tax, Rein in Spending Instead » The Foundry « Eastaustinvoice’s Weblog

    16. Silas Valparaiso,In says:

      Spirit of 76 I concur. I have looked into Fairtax.org. It’s seems a better way of getting things done. Only problem with the Tea parties is not knowing the next step I think another movement should be with the Fourth of July, maybe some flyers to hand out to show the sheeple the problems. Another movement on 9/11 as a remainder. Of course tax day,fourth of july next year. Then the march on washington D.C. 9/11/10 for which is a election year. I think that might wake up the elites.

    17. Jim, Springfield,Mas says:

      FLAT FAIR TAX FOR EVERYONE.

      Term limits for Congress.

      Have binding question on ballot; they won't do it to themselves.

    18. Dennis A. Social Circle Ga. says:

      I think it is time to do away with the income tax and the irs. We need to enact the flat rate tax, spend money pay taxes, this would insure that all paid their fair share. The dems will not let this happen because they want all of us to be in the dark about how much tax we actually pay. When the idea of a “FAIR TAX” comes up all they want to yell is that the republicans want to add a 23%tax on everyone. This can not be futher from the truth. Ask anyone how much they paid in taxes in 2008, the answer will be “I GOT SO MUCH BACK”, most people do not know the total of their tax bill. We have been looked at like a bunch of mushrooms, KEEP THE PEOPLE IN THE DARK AND FEED THEM CRAP,they will never know what we the dems are doing.

    19. Will, Keller, TX. says:

      I worked in the Philippines for 33 years. They have a VAT tax. It is on everything,… doctor services, entertainment, every product you buy, etc. I would hate to see it here. It is a very regressive tax and hits the poor the hardest.

      Government must be cut down in size, get out of private business. I'll agree that some regulations are necessary,… we can not afford to have businesses too big to fail. Break up the big insurance and banks. Let companies fail when they are too stuipid to succeed! They can reorganize and succeed or close. If they were providing a service that is needed, someone will start providing it and make money doing it!

      May the government start using some common sense. Will

    20. Normca says:

      Break up the big insurance and banks ? Government should stay out of private business ? Which one is it ? Both insurance and banks did fine until the government required loans to people who could not afford them, and then dismissed the need to regulate Fannie and Freddie [who received money from chairmen of committees]. Losers failed and went out of business. So why interfere ? For one, if the democrats and Republicans did not require the bad loans [sub prime] this crisis would not exist. Banks and insurers are already regulated. I agree though, if they make bad decisions, let them fail [but if the government imposes requirements that increase the risk, then government needs to pay the the losses - yes with tax payer money].

    21. Richard Bulgarelli says:

      What people don't realize about a VAT is that it is put on every producer who will then raise their prices to cover it. The last person in the chain, the consumer, will end up paying their portion and every other producers portion that is in the product chain through increased product or service prices. A VAT is the most regressive tax a consumer can pay. This will be on top of the income tax, not a replacement.

    22. Sylvia Smart says:

      1. Congressional term limits! The congressional judicial committee will be abolished, and Senators will be randomly computer selected to process each judicial nomination for confirmation or rejection – equal number of senators from each political party will be selected for the committee.

      2. Abolish the IRS and institute a flat federal sales tax across the board (15% Federal & 15% State) – no other taxes – no loopholes – no special exemptions! Imported products will be taxed at prohibitive levels.

      3. Move everything that isn't a legitimate Federal issue back to State jurisdiction. Get the Feds out of our faces and out of our wallets.

      4. Schedule Congressional Sessions in DC to be held in July and August – make their work day a mandatory 8 hours per day with Marines posted outside their offices to monitor/record every single person who comes and goes and to post their credentials. They stay put in DC until the session is ended and then they go home to work for their State. No coalitions between Senators will be allowed.

      5. The Federal government will disengage from private industry. They will disengage from all Union support and affiliation and will be prohibited from interfering in the free-market, right to work process.

      6. Foreign ownership of TV, Radio, communication systems, Satellite systems, newspapers, and publishing companies and news media will be illegal. Any percentage of ownership will be illegal.

      7. All legitimate votes will be counted in all elections. If the votes cannot be properly counted the election will be declared null and void. Each candidate will be provided the exact same amount of money, airtime, and access to TV/radio/print media coverage. NO one will ever be able to buy an election again.

    23. Pingback: Reject the Value-Added Tax, Rein in Spending Instead | India Updates

    24. John98 says:

      And the online catalog, in German or English, mystified me. ,

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