Category: Value Added Tax

As we enter into the end of 2010 the media is full of reports about the increase in taxes that are on the way whether by the expiration of the Bush tax cuts or an increase of taxes imposed by the government.  I have come across and article that was written by Lanny Davis who was special counsel to President Clinton in which he discusses a new ” tax increase bill”  introduced in Congress.  According to this bill there will be a 1 percent “transaction tax” on every financial transaction and we would all pay one cent for every dollar for these transactions whether by cash, credit card.  The article says this tax will not apply to the buying or selling of stock.

Looking at this on the surface some might say ” it is only a penny and it is no big deal” but I say “It is a big deal” if you look at the history of tax increases.   Remember the tax on your phone bill that was still being levied until recently to pay for the  Spanish-American war of  1898!!  This was just recently removed from the phone bill after 100 years and the war only lasted a year! Yet, we as the tax payers were not offered a refund were we?  Look at the payroll tax which started out as “1 percent” deducted from take home pay and compare to where it is today!! These are just two examples but there are many more of this government trying to solve their out of control spending by raising taxes!!

You can be assured that if this bill passes Congress and this “1 percent” tax on financial transactions is imposed a few years later Congress or the President will decide this needs to be increased by 2,3 or 4 percent!!  It will never be enough and this is why we need to pay attention when a bill like this gets introduced in Congress and defeat it now before it takes root.  Because if this “tax bill” is allowed to take root then we will be stuck with this tax for 100 years just like 100 year old tax on your phone bill to pay for the Spanish-American war of 1898!

If you read the title of my post you might think it is vulgar or something, but trust me it is not.  I name my post this in honor of the Value Added Tax that could possibly be placed on Americans in the very near future. The VAT as it is called is like a sales tax and would be added on to an item when it is purchased by a consumer, almost like a national sales tax with the Federal Government getting the proceeds.  You might look around and say “there is no way this will pass the Congress” but think again!! If you have been paying attention and not sidetracked by American Idol and Hollywood stuff the country is broke.  The government is spending way more money than it has and the revenue has to be made up somewhere and that somewhere will be made on the backs of the middle class.  The VAT tax would also hurt the poor, but rest assured the government will create some loophole to exclude the poor.

The idea was floated by former Federal Reserve Chairman Paul Volcker.  You might say “this was just his idea but not our governments plan”.  This was a trial balloon put out to test the waters to see what kind of reaction there would be.  Our government knows if they floated the idea people would be upset so they sent out Paul Volcker to do it.  You watch after the November election the VAT will be on the table because if it was put on the table before the election then who ever supported it would be voted out of office.  The VAT is a way for our government to take more of our money because they spend too much, and I believe if the VAT is implemented it could collapse the middle class. I mean look at Europe! a lot of those countries have the VAT and they struggle economically.  I read that Greece’s debt was about 14% of their GDP and they need a bailout to stay afloat. Our debt is about 10% of our GDP and our leaders know if we get to 14% that was is happening in Greece could happen here.

We must take a stand against the VAT and demand our government control spending because when the “‘have’s don’t have any money left to give the have not’s” then what will we do!! I have posted a link to an article about the VAT.