Wednesday, April 21, 2010

Say Hello To The VAT

President Obama has stated that a European-style VAT tax is still an "option" for helping to close the budget deficit. That should be re-phrased. It's not an option - it's a necessity. There is simply no way to pay for a comprehensive personal-and-corporate welfare state of the sort this Administration has brought into being merely by taxing the hell out of people whose incomes are more than $250,000 a year. If Obama has realized that, bully for him, but it puts the lie to his campaign promise not to raise taxes on middle- and lower-income earners, who are more likely than the rich to feel the pinch when the prices of consumer goods begin to climb precipitously. The Senate is likely also correct in declaring that this tax, if enacted, will be a significant drag on consumer demand and hence on economic growth, but if they were concerned about that, they ought not to have voted for the stimulus bill, Obamacare, TARP, etc. The Democrats have enacted a lot of expensive legislation over the past two years - it's only fair that they be the ones forced to present the bill to the voters.

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