The Obama administration floated a trial balloon a couple of days ago, when a mid-level administration flunky openly discussed the possibility of the Federal government imposing a Value Added Tax (VAT) in order to raise more tax revenue. A VAT is essentially a Federal sales tax, added to everything that is sold in the nation. It is insidious ... a tax is added at each stage of a product's production, so that each product actually is charged multiple taxes by the time it reaches your hands. European nations widely use this to pay for their socialist programs. The VAT adds anywhere from 15 to 36% to the price of a product, by the time it reaches the consumer.
Imagine ... you purchase a car today for $40,000. Because VAT is tacked onto everything that goes into that car at miultiple stages, that car might end up costing you $55,000 if a VAT is instituted in this country.
The trial balloon is a time tested method of administrations testing the political waters ... a mid level official makes a public statement, then the White House sits back and gauges public reaction to determine if they should adopt the object of the statement as policy. The fact that Obama directed this balloon's release means that a VAT is already in the works.
More tax related news:
Ben Bernanke, Chairman of the Federal Reserve, yesterday in Dallas:
"The arithmetic is, unfortunately, quite clear. To avoid large and unsustainable budget deficits, the nation will ultimately have to choose amoung higher taxes, modifications to entitlements such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above. Unless we as a nation demonstrate a strong commitment to fiscal responsibility, in the longer run we will have neither financial stability nor eco9nomic growth.
Douglas Elmendorf, Director of the Congressional Budget Office, on April 7:
"US fiscal policy is unsustainable, and unsustainable to the extent that is can't be solved through minor changes. Government would need to make changes in some set of large programs (Social Security, Medicare, etc.) and large parts of the tax code that we think of as the fundamental part of the budget."
The CBO estimates that Obama's policies, the ones that have already been enacted, will add a trillion dolalrs to the budget deficit each year. This does not take into consideration anything else he will force down our throats in the future.
To pay off the national debt at this point, before Obama's mandates kick in, it will take over $32,000 dollars per person (every man, woman, and child), both legal and illegal, in the United States. And that's just to pay off the debt ... it does nothing to keep everything running normally.
Anyone in their early early to mid-50s or younger, should plan on not having any Social Security or Medicare benefits to draw upon. Both of those programs will be well beyond broke before you get a chance to draw any benefits against the thousands of dollars you paid in taxes into those programs over the years.
Some tax facts:
According to the government's own numbers, 47% of Americans pay NO income tax at all. Most of those who don't actually qualify for income tax refunds! So, folks who don't pay anything actually get paid by the government. Obama's excuse for this has been that they pay other taxes. Hey STUPID ... this is income tax we're talking about. Why should someone who hasn't paid any be given a refund? Oh, BTW - if they haven't paid any, it's not a refund ... it's a handout. (a real world example I heard on the radio - a man in PA, made less than $30K last year, and had only $900 withheld from his pay for income taxes. He received a $2300 refund from the government)
According to those same government numbers, the top 10% of wage earners in the US account for 73% of all income taxes paid.
Under Obama's proposed tax guidelines, if you make $50,000 or less per year, you will not owe any income tax. If you make $60,000 or more, you will fall into the upper level tax bracket. So, a $10,000 gap is all that seperates the poor and the rich in Obama's world. What happened to that 'if you make under $250,000 per year, you won't see your taxes increase one dime' promise Obama made repeatedly during and after the campaign?
The base tax rate of the top 10% of wage earners (those who make over $336,000 per year) is already approaching 50%, and is likely to go way over 50% if Obama has his way. Imagine that ... over half of your paycheck being confiscated by the government. That isn't right, no matter how much money you make.
This lunacy is so plain to see that even Democrats in the Federal government acknowledge the deficit problem. The HUGE difference between them and the Republicans is this: Republicans want to cut the deficit by cutting spending. Democrats want to cut it by raising taxes on the 'rich' - which by their definition is damn near everyone.