More on the VAT

The administration’s fiscal commissars, Ben Bernake and Paul Volker, have been talking up the idea of a VAT to “save” us from a crushing debt crisis. The Value Added Tax (more here) is popular in Europe and you will be hearing much more about it in the coming weeks and months. (story here from Red State)

President Obama is vetting a new national sales tax (commonly referred to as a VAT) to extract more wealth from the private sector to sustain his insatiable hunger for more government spending.  Former Fed Chairman Paul Volcker and current Fed Chairman Ben Bernanke have commenced a vetting strategy to convince Americans that they need to give more and more money to an every-expanding and bloated federal government.  Congress needs to just say no to a VAT — and increased taxation — as part of any pitch by this Administration to balance the budget.

Volker and Bernanke have used a two pronged strategy to vet the VAT.  First is fear mongering.  Bernanke argues that Americans need to choose between higher taxes or massive cuts in critical government programs.  He mentioned Social Security, Medicare, Education and Defense as areas of government spending that would be targeted if we don’t raise taxes. This is a false choice.  The federal government needs to reform entitlement programs, needs to root out waste fraud and abuse and should eliminate programs like the National Endowment for the Arts.

Our current fiscal crisis at all levels of government is not a revenue problem – it is a spending problem. Increasing taxes, or adding new ones, will not solve our problems. Only serious reductions in the size and scope of government will bring the country back to fiscal normalcy.

Read the whole thing.


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