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  • Volcker Pronounces VAT a No Go

    According to Paul Volcker, former Chairman of the Federal Reserve and a senior economic advisor to President Obama, an European-style Value Added Tax (VAT) would be a good idea for the United States but is too unpopular to be under consideration “now or for the indefinite future.”

    On the one hand, Mr. Volcker’s public acknowledgment of the VAT’s unpopularity shows he is a MOTO – a master of the obvious. Even this early in the debate, 85 United States Senators stood up on April 15 to oppose a VAT.

    On the other hand, Volcker’s recognition of the VAT’s enduring unpopularity throws cold water on the big-government crowd who hope to fund their massive spending dreams with VAT revenues. For example, David Ignatius writes in The Washington Post today that the sensible response to “our ballooning federal deficit” is a VAT.

    Ignatius goes on to write that “by ruling out a VAT when it could keep the federal deficit in check, politicians have all but guaranteed that the debt crisis, when it comes, will be more damaging.” Not really. According to the President’s own projections revenues will soon recover to normal levels, and so the deficit problem is clearly and solely a spending problem.

    What debt crisis? The European sovereign debt contagion is now well underway, taking the tourists’ Mediterranean trek first to Greece, then Portugal, on to Spain, then Italy, and washing back onto U.S. shores before long. That’s the debt crisis Ignatius refers to, and it relates closely to the Glut the Beast strategy the President concocted to finance his spending surge with a VAT splurge.

    Obama’s strategy does not depend on Europe destroying its finances first, and in fact the European contagion will probably forcing Obama to move before he’s ready. The quandary Europeans suffer is they already have a heavy VAT financing their bloated spending, so they have to cut spending. Obama and friends hope to avoid reversing course on spending by convincing American taxpayers that when the debt crisis finally reaches the U.S. they will have to suck it up and go VAT. As Volcker now acknowledges, VAT not now, and not in the “indefinite future.” The Beast is going on a diet and neither Volcker, Ignatius, or Obama can stop it.

    Posted in Ongoing Priorities [slideshow_deploy]

    9 Responses to Volcker Pronounces VAT a No Go

    1. Jill, California says:

      Like Glenn Beck says, watch what the other hand is doing. The VAT isn't off the table. Obama and his ilk will merely repackage the idea and hit us from another direction. They can't help it. They are too addicted to spending.

    2. G Rome Laguna Niguel says:

      If only Obama would listen to a man who he appointed, and who had a great deal of experience in the economic community under various Administrations. From the background noise, it seems as if Volk has been assigned a position for vanity, and still he has a voice. Perhaps it should be heeded. Taxation is a certainty. The direction of certain taxes should be construed as anathema to the reconstruction of the economy at this time. The VAT is merely one of those. Place "sin taxes" on products, but do not allow this to be a subservient and crowning achievement for the ushering in of a new round of taxes that effect a great deal of the populace. At this time, we need an infusion of investment. That also means that we need some loosening of the credit strings, and we need some entrepreneurs to jump back in to the pool and provide some start-ups that will create a new backbone for this U.S. economy.

      That means tax breaks for those that are willing to venture out and take a chance. It also means an incentive for those that will purchase such developed products. A VAT will most certainly drive up the price of such products. A VAT will most certainly ensure that the Rich will still be able to afford their luxuries, but from the cow to the dairy to the consumer, there will be an added expense that will hurt those already striving to make it through this economic climate so marked by the HAVES and the rest of us .. likely most of us looking at this website.

    3. Drew Page, IL says:

      I believe that Jill in CA is correct. VAT will be pushed, regardless what they call it. Most likely Mr. Obama will leave it to his Deficit Reduction Committee. Of course, he will stand back and let the Committee recommend it and have his Congressional minions like Pelosi and Reid push it in Congress.

      If it ever passes, we are finished.

    4. Lloyd Scallan - New says:

      Jill is spot on! When are the American people going to realize that anything

      Obama and his lackeys say is lies to devert the people's attention while the work behind closed doors to do just what Obama and his lackeys claim they will not do. It worked for Obamacare. So they continue to same tack.

    5. Tim AZ says:

      You mean its just off the table for today right? We are well versed in the regime's tactics.

    6. A_Nonny_Mouse, Auror says:

      So far, EVERY POLICY that deep-thinking pundits have proclaimed "But they can't/ shouldn't/ won't dare/ to do THAT!!" has indeed been foisted off on us although we know it's illegal/ immoral/ unconstitutional/ impractical/ fiscally irresponsible.

      What makes this P. O. S. idea any different?

      As long as government sees living breathing taxpayers, they'll find a way to spend more and tax more. When the chaos they're creating finally destroys those currently in power, maybe –MAYBE– we'll be lucky enough to elect a President and Legislature who care more about the country and its constitution than about Party, Power, and "We Won".

      And, then again, maybe we won't be that lucky at all.

    7. Rachael says:

      As a life-long principle I have emulated moral, ethical, successful examples. Somethow the European economic system does not fit that description. Just a cursory ready of the headlines should make that fairly obvious. However, if you are in the WH and your agenda is to redistribute income the perhaps Europe is a great model. As for me and my house, we will pursue the entrepeneurial capitalist spirit.

    8. Dewayne Burgess, Topeka Ks says:

      I’ve had experience with a VAT in Europe back in my Air Force days. It sucks. I can’t be more plain than that. I now own a retail western store and I can envision a pair of boots currently priced at $159.95 being priced at $259.95 after enactment of a VAT, with 8% sales tax on top of that. It sounds great to big government liberals, but the reality is it would be a wrecking ball for small business.

    9. peggy minnesota says:

      come january we will be in deep doo doo if any of the tax cuts we have now end obama wants to tax us in to another world vat tax, tax on everything in sight and fines to boot and premiums no one can afford he is an idiot if he thinks there is enough jobs out there to cover all of his agendas of taxing us to death and beyond . i say we must stop the devil in his tracks come november all incumbants out even lynsey gram and mccain no progressives either they are out too i am just an american grandma that is fed up with politics and fed up with entitlement cry babies go to work people

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