Thursday, April 8, 2010

Pre-empting the V.A.T tax

On Tuesday, Obama economic advisor Paul Volcker confirmed what many conservatives have assumed for months--Democrats are considering the implementation of a national sales tax in order to pay for the massive amounts of money that they have added to the debt since Obama took office. This national sales tax, known to economists as the “Value Added Tax” or V.A.T, would apply to every American and would be added to the amount we pay for almost every product we buy. The tax would be higher for some types of items than for others, but all in all it would hit middle and lower class Americans the hardest, diminishing their already limited buying power.

Now, let’s not dwell on the fact that putting such a tax in place would be a complete reversal of Barack Obama’s oft-repeated campaign promise that he would not raise taxes on anyone making over $200,000 a year. By now we should all know that this president’s promises are worth about as much as the promises that Tiger Woods makes to adult film stars.

Nor should we assume that those who continue to support this president are going to begin questioning why such a tax is warranted. In a sane world, you’d think this group would be among the first to question the V.A.T.’s necessity. After all, Obama's base seems to be the only group that believes that Obamacare is actually “deficit neutral” and that the $787 billion stimulus package is well on its way to bringing about a return to 5% unemployment and a sustained period of robust economic growth. Why would people who see such a bright and prosperous future think that a something as drastic as a V.A.T was needed? But analytical thinking was never the Obamabot's strong suit. Alas,convincing these dedicated Obama devotees to go against the president is hopeless. Obama’s core supporters are split into two groups. Those who truly believe that turning the U.S. into a European-style, social welfare state is a good thing and those who don’t pay any attention and are simply waiting for their share of Obama’s “stash” to show up in their mailbox. Both are a lost cause.

However, there remains a large group of independent voters who are still in the process of forming their initial opinion about President Obama. This group may not have been able to fully grasp the complexities of the health care reform debate, but they will sure as hell understand what a national sales tax will do to their pocketbooks. My guess is that they are not going to like it one bit.

This morning the possibility of a federal V.A.T was the primary focus of conservative radio talkers. Conservative hosts should keep the focus on this new tax for the next few months. Make sure the base knows everything about it--how it will be implemented, its negative effects on the economy and its regressive nature. Conservative talk radio and Fox News were instrumental in ensuring that the conservative base knew far more about the details and consequences of Obamacare than did our liberal opponents. This information trickled down the pipeline to moderates and independents and they quickly turned against the bill forcing Democrats to pass a wildly unpopular piece of legislation contrary to popular will. This act of hubris has threatened the Democrat’s congressional majorities and has hindered their ability to pass other items on their agenda. The same kind of education of the public should occur with the V.A.T and the conversation needs to begin right now.

Next, every Democrat who is running for office this year should be endlessly challenged by their opponents and the conservative media on the subject of the V.A.T and it should be demanded that they go on record either in support or opposition to the tax. Between now and November, an effort must be made to force every single one of them to take a position. If House Blue Dogs and senators in tough races admit that they will support the tax or refuse to say that they will oppose it, G.O.P. candidates will have a huge cudgel with which to bludgeon them throughout the summer. (Note: I am not advocating the literal bludgeoning of Democrats.) By making the V.A.T part of the national conversation before it is even proposed, we can also force President Obama to address the issue publicly. If he backs off, great. If he admits that he’s considering it, even better. Bigger gains for us in November.

Finally, it is important that conservatives cut off the Democratic talking points at the knees before they have an opportunity to infect the weak-minded, “Yes We Can” crowd. When it comes to selling the V.A.T, the Obama administration and its congressional allies will almost certainly embrace a talking point in which they allude to the fact that a national sales tax is an idea that has been embraced in the past by conservatives. Conservatives must make sure that people understand that our side’s support for such a tax is conditioned on the V.A.T replacing the progressive income tax. We are adamantly opposed to it being levied in addition to the income tax as the Left wants to do.

If Obama and the Democrats had wanted to be honest about their plans, they would have proposed the V.A.T prior to the budget busting triumvirate of stimulus, omnibus and Obamacare. Instead, they plan to propose it after the fact and disingenuously warn the American people that our debt is going to become unsustainable without the new revenue source. The conservative response should be “tough luck.” We were unanimous in our opposition to these big spending programs and would be more than happy to defund them and repeal them, but otherwise our plan is to starve the beast. If we kill the V.A.T and Democrats go ahead with their reckless spending, 100% of the blame for the repercussions should be aimed at the Democrats. Such are the risks of partisanship and broken promises. Time to pay the piper.

The truth is that the implementation of a European-style national sales tax would most likely lead to European-style economic stagnation and unemployment. But that increasingly seems to be the Democrat’s long-term plan. It’s time to call their bluff. We need to make this summer the summer of the V.A.T in order to ensure that, regardless of the results of November’s elections, a national sales tax does not become a permanent revenue source that will, in all likelihood, just be frittered away by Congress anyway, leaving the debt at the same staggering heights that it has reached during Obama’s first year in office.

Last week, at a town hall meeting, a woman named Joyce Ravis echoed the thoughts of millions of Americans and told the president straight up:“We are over-taxed as it is.”
Obama responded with a 17 minute, 2500 word, rambling filibuster in which he talked about health care, Wal-Mart, roof repair, George W. Bush (of course), foreign aid and something about a janitor who cleans office buildings. Only once did he even come close to addressing Joyce’s major concern and he essentially brushed that off by saying

“I don't think this will affect you, but I don't know -- you know, I don't know your family's circumstances.”


If Obama was an honest politician, and most of us can now say with a great deal of certainty that he the antithesis of such a being, he could have trimmed his 2,500 word non-answer down to a 15 word straightforward response and said:

“If you think that your taxes are high now Joyce, you ain’t seen nothing yet.”

This article was written by fellow patriot Dan Joseph.

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