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McCain Throws Down the VAT Gauntlet

Posted By J.D. Foster, Ph.D. On April 15, 2010 @ 6:19 pm In Economics | Comments Disabled

Senator John McCain [1]

The capstone of President Obama’s the “Glut the Beast [2]” strategy is to maneuver the country into accepting a massive new Value-Added Tax (VAT).  This as yet unannounced policy has been lurking in dark policy corners for months, with no word from the President.  Senator John McCain (R-AZ) has decided not to wait on Obama’s pleasure, and so has offered an amendment in the form of a Sense of the Senate Resolution to the bill pending on the floor of the Senate to extend Unemployment Insurance benefits.  The McCain resolution reads simply:

It is the sense of the Senate that the Value Added Tax increase will cripple families on fixed income and only further push back America’s economic recovery.

When they called the roll on the McCain amendment, 84 Senators stood with America’s families and Senator McCain against the VAT, while 13 made clear their intentions to soak the American taxpayer with a devastating new tax.   This vote was strikingly reminiscent of the 1995 Senate vote that sent the Kyoto Protocol on global warming to its well-deserved grave.

The “Glut the Beast” strategy is beguilingly simple.  It starts with hiking federal spending as fast as possible.  On this, Obama and his allies have been notably successful.

This federal spending surge has turned the unsustainable long-term fiscal picture about which so many have warned into a short-term fiscal disaster to which the President can speak gravely as though his policies were not the major cause.  In the face of this fiscal disaster he can even create a Debt Commission to buy time until he is ready to make his move.

The next step is critical.  The President and his many allies must establish the spending is nothing new really, that it is inevitable, vital, an Act of God, anything but the consequence of their policies and strategy.   They thereby hope to create the belief that reversing the spending surge is impractical substantively and politically.  As Obama’s huge deficits must be tamed, and if spending cannot be cut as he implies, then taxes must increase.  And there comes the VAT to save the day.

Enacting a VAT would be the crowning achievement as Obama and his congressional allies seek to recast the nation into a full state of dependency on Washington.  Nothing less is at stake.  If Americans have other ideas for the country’s future, then they need to challenge anyone running for office, anywhere in the country, to take a stand on the VAT just as John McCain’s colleagues did in the United State Senate.  As they do it will become apparent to all that the United States is not VAT country.


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URL to article: http://blog.heritage.org/2010/04/15/mccain-throws-down-the-vat-gauntlet/

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[1] Image: http://www.foundry.org/wp-content/uploads/McCain100415.jpg

[2] Glut the Beast: http://www.foundry.org/2009/06/30/obamas-battle-of-the-bulging-deficit/

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