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Obama Calls for a VAT

Posted By Curtis Dubay On April 22, 2010 @ 12:57 pm In Economics | Comments Disabled

President Obama has consistently ducked the question on whether he is considering a massive tax hike in the form of a value added tax (VAT) – until now. Yesterday in an interview with CNBC [1], the president made clear that he is open to a VAT – once he has seen the recommendations his Debt Commission makes.

The president’s comments spell out what has been obvious for months: the debt commission is a stalking horse for the VAT as the solution to close massive deficits today and in the future.

A VAT would be a massive tax hike [2] that would transfer trillions of dollars each year from the wallets of every American to Washington. It would permanently slow economic growth and lower the standard of living for generations of Americans to come. It would also be a bottomless well for Congress to go back to each time it wants more of our money to pay for new spending programs. Once a VAT is in place turning back the growth of government will be next to impossible and the efforts of President Obama and his congressional allies to recast the nation into a full state of dependency on Washington will be complete. The stakes are that high.

As JD Foster pointed out last week [3], passing a VAT has been part of President Obama’s long-term strategy all along. First he had to jack up spending rapidly to create a rapidly approaching fiscal crisis. He has accomplished that goal. Next, he must establish that cutting spending is impossible because it is in some way inevitable and essential, and thus the result of something beyond anyone’s control as opposed to — say — his own policies.

That leaves tax increases as the only cure for the deficit. The Debt Commission will fit neatly into this plan should it recommend a VAT. President Obama can then take comfort in its findings and point to this panel of experts which found that the VAT is the only solution to the crisis.

Last week, Senator John McCain (R-AZ) offered a sense of the Senate resolution that stated: “It is the sense of the Senate that the Value Added Tax is a massive tax increase that will cripple families on fixed income and only further push back America’s economic recovery.” The Senate voted 85 to 12 [4] in favor of that resolution.

Foster goes on to say [5], Americans who want to save their country from the damage a VAT would inflict need to challenge anyone running for office, anywhere in the country, to take a stand on the VAT just as Mr. McCain’s colleagues did in the Senate. Every town council member, every mayor, governor, or congressional or senatorial hopeful should be pressed to declare whether he or she stands for or against the VAT. As they do, it will become apparent to all that the United States is not a VAT country.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/04/22/obama-calls-for-a-vat/

URLs in this post:

[1] interview with CNBC: http://news.yahoo.com/s/ap/20100421/ap_on_bi_ge/us_obama_tax

[2] a massive tax hike: http://www.heritage.org/Research/Reports/2009/07/Value-Added-Tax-No-Solution-for-Health-Care-or-Fiscal-Woes

[3] JD Foster pointed out last week: http://www.foundry.org/2010/04/15/mccain-throws-down-the-vat-gauntlet

[4] voted 85 to 12: http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00115

[5] Foster goes on to say: http://www.washingtontimes.com/news/2010/apr/22/mccain-the-beast-and-the-value-added-tax/?utm_source=Newsletter&utm_medium=Email&utm_campaign=Heritage%2BHotsheet

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