Value-Added Tax (VAT)

Value-Added Tax (VAT)
Posted by Gordon on April 12, 2010 at 10:00pm


"At a private event the other evening, it has been reported that one of the Obama Administration's lead economic counselors, Paul Volcker, indicated the support for a Value-Added Tax (VAT) may be more achievable than in the past. ... [I]n order to fund the record spending of the federal government, hard-working families and small businesses are going to be required to foot more of the bill ... it is that simple. After passage of a nearly $1 trillion health care bill, the Obama administration cannot longer deny this. The only question in my mind has been how much will our taxes be raised -- and when. A VAT is a tax that is added to a good at each stage of the production process. ... Not surprisingly, VAT taxes are not borne wholly by the producers themselves. Rather those incremental taxes are passed along to consumers in the form of higher prices. Even [more] troubling, this tax comes with a complete lack of transparency. Unlike a sales tax, which the consumer sees as a line item on their sales receipt beyond the retail price, a VAT is simply a hidden tax. It is another way for the federal government to take our money and deliberately leave taxpayers in the dark about their share of footing the bloated federal budget. Now keep in mind, the addition of a VAT would be on top of our already overly burdensome federal tax system -- meaning that you would continue to pay your federal income, payroll, capital gains, and estate taxes. ... This was the first salvo in what many of us have feared -- Democrats gearing up to increase our tax burden by creating a new form of federal taxation."

--columnist Michael Reagan