Liberals Seek VAT to Pay for Big Gov’t

Obama Hints At Massive Tax Hike

What is a president to do when his gargantuan spending increases threaten to double the national debt and push the federal government into insolvency? A conservative would put together a commission to eliminate waste, fraud, abuse and unnecessary programs (all those things the federal government is doing but shouldn’t be). A liberal would raise taxes.

Well, President Barack Obama may take a page out of the European social democracy playbook by employing a new Value Added Tax (VAT) as a means to balance the federal budget on the backs of American consumers.

According to Dan Mitchell of the Cato Institute, a VAT is “a type of national sales tax, levied on the value-added at each stage of production. Consider a piece of furniture: The VAT would be imposed when the raw timber is sold, when the sawmill produces lumber, when the manufacturer builds a chair, a tax at the wholesaler level and then when a retailer sells the chair to a consumer.” J.D. Foster of The Heritage Foundation argues that liberals love this type of tax, “because it can raise vast new revenues without the taxpayers being really sure who took their money.” Instead of cutting spending, this administration is giving serious consideration to a sneaky new VAT.

The Obama administration’s consideration of a VAT runs against the desire of the country and our elected officials. As evidence, Senator John McCain (R-AZ) offered a Sense of the Senate Amendment for the proposition that the VAT would “cripple families” and “push back America’s economic recovery.”

The Senate voted 85-13 for the McCain Amendment. Still, after the vote, the President indicated to John Harwood of CNBC that a VAT remains on the table. Obama argues that a VAT, “worked for some countries, would be novel for the United States.” Hold on to your wallet, because President Obama may be pushing a VAT later this year (after the congressional elections, of course) once he receives recommendations from his hand-picked National Commission on Fiscal Responsibility and Reform.

President Obama’s Budget

Last week, the Senate Budget Committee worked on the president’s $3.8 trillion budget for the next fiscal year. The estimated budget for this year falls between $1.4 and $1.6 trillion. Conservatives in the Senate are working to make sure that Obama’s budget for next year doesn’t further expand the federal government and increase debt.

Sen. Judd Gregg (R-N.H.) expressed concern hearings about high spending that could consume “22 percent of GDP.” Gregg argued that deficits will grow because of, “the influence of the health care bill and emergency bills, which we know we’re not going to get our revenues up to (the projected), level, so we know we’re going to have this deficit.” The next step is for the Senate as a whole to consider a budget. Americans should keep watch to see if any senators stand up to protect taxpayers.

International Taxation

Not to be outdone by President Obama’s potential VAT, the International Monetary Fund (IMF) would like to impose its own international tax on you. According to The Washington Post, a leaked internal memo approved by the IMF’s Managing Director Dominique Straus-Kahn, the IMF will instruct the G-20 countries to change the global financial system and impose a tax that would raise $300 billion from you, the American taxpayer. Any effort on the part of international organizations to impose taxation on Americans, or even to recommend increased taxes on Americans (what our Founders called “taxation without representation”), should be resisted.

Supreme Arrogance

President Obama is in the preliminary phases of finding a replacement for Supreme Court Justice John Paul Stevens. He met last week with Senate Republicans and Democrats as part of the constitutional role of the Senate. Presidents have usually stayed away from litmus tests, yet the president last week declared, “I want somebody who will be interpreting our constitution in a way that takes into account individual rights and that includes woman’s rights.” This seems to signal that the president’s litmus test for nomination to the Supreme Court includes a ban on pro-life lawyers.

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