The Coming VAT: Poor Americans, Get Ready For GIANT Tax Increase

Remember candidate Obama’s ten thousand promises that he would absolutely not under any circumstances raise your taxes so much as one dime:

“But let me perfectly clear, because I know you’ll hear the same old claims that rolling back these tax breaks means a massive tax increase on the American people:  if your family earns less than $250,000 a year, you will not see your taxes increased a single dime.  I repeat: not one single dime.”

April fools, you fools.

It turns out this is the same guy who is on tape at least eight times saying all the health care negotiations would all be on C-SPAN – and then he went to closed-door meeting after closed door meeting that resulted in a health care bill that NOBODY knows anything about.  It turns out that this is the same guy who promised he would unite the country in a bipartisan manner – and instead broke that promise and became the most polarizing and divisive president in history.   This is the same guy who said he would NEVER allow health care to pass by the awful partisan reconciliation tactic – and then he did exactly what he promised he wouldn’t do.  This is the same guy who demonized Republican Senate Minority Leader Mitch McConnell for doing what his own chief of staff had just done only the day before.

Yeah, well, that same guy is on the verge of breaking another one of his fundamental promises to the American people on taxes.  And it’s going to be the poor who Obama is going to hose the worst.

JUST LIKE I AND OTHER CONSERVATIVES ASSURED YOU HE WOULD DO BEFORE THE ELECTION.

The VAT (Value Added Tax) is a consumption tax which is both socialist and regressive – in other words, the worst of both worlds.

It will make Obama a liar yet again.  But seriously, what else is new?

White House economic adviser refuses to rule out VAT — six different times in one TV appearance
By: Mark Hemingway
Commentary Staff Writer
04/20/10 3:28 PM EDT

On Sunday, the New York Times reported that the Obama administration’s economic team was kicking the policy tires on a national value added tax (VAT) as a means of dealing with the deficit, among other things. But earlier today, White House press secretary Robert Gibbs said the administration was not considering a VAT.

If Gibbs is telling the truth, then why did White House economic adviser Austan Goolsbee, appearing on MSNBC’s Morning Joe, refuse six different to rule out a VAT? Americans for Tax Reform kept count:

MARK HALPERIN: Will the President ever consider tax reform that will involve a VAT? Would he ever consider it?

(Refusal #1) GOOLSBEE: Look, we are not, the  report — and I’m not sure where it came from cause it’s not anything I saw — was that they were contemplating a VAT, that is not true. We have stood up this bipartisan fiscal commission, which as I understand it is considering a whole bunch of things.

HALPERIN: But would he ever consider..

(Refusal #2) GOOLSBEE: He’s going to consider whatever comes out of that fiscal commission.

HALPERIN: So if they recommend a VAT, he would consider it?

(Refusal #3) GOOLSBEE: I’m not going to get into a linguistic game about it.

HALPERIN: Well it’s not a linguistic game.

(Refusal #4) GOOLSBEE: He’s looking to see what comes out of the fiscal commission. He’s going to look at it.

HALPERIN: We had a President for eight years who said ‘no new taxes, we’re not going to raise taxes’. This President said ‘no taxes on the middle class’. Arguably there are taxes in the healthcare bill that will hit the middle class. So again, a VAT would be a big change in America. Would he consider it, if the commission recommends it,  would he consider it?

(Refusal #5) GOOLSBEE: As you know, the President cut taxes for 95 percent of the workers in the stimulus. Many many billions of dollars. The President is committed to this bipartisan fiscal commission process and he’s going to seriously consider all the things that they put forward and he’s going to look at them. It doesn’t mean he’s supporting a VAT. We haven’t even contemplated a VAT.

HALPERIN: But if they recommend it, it’s not something he’d rule out?

(Refusal #6) GOOLSBEE: I’m not going to get into a hypothetical thing about it. He’s committed to a bipartisan fiscal commission.

It’s safe to say they are considering a VAT, all right.

So Obama officials refuse to dismiss the Obama-pledge-busting value added tax on the poor and middle class.

Surely Obama is against breaking his word?!?!

Nope.  He’s pretty much fine with that.

Obama suggests value-added tax may be an option
Apr 21 05:33 PM US/Eastern
By CHARLES BABINGTON
Associated Press Writer

WASHINGTON (AP) – President Barack Obama suggested Wednesday that a new value-added tax on Americans is still on the table, seeming to show more openness to the idea than his aides have expressed in recent days.

Before deciding what revenue options are best for dealing with the deficit and the economy, Obama said in an interview with CNBC, “I want to get a better picture of what our options are.”

After Obama adviser Paul Volcker recently raised the prospect of a value-added tax, or VAT, the Senate voted 85-13 last week for a nonbinding “sense of the Senate” resolution that calls the such a tax “a massive tax increase that will cripple families on fixed income and only further push back America’s economic recovery.”

For days, White House spokesmen have said the president has not proposed and is not considering a VAT.

“I think I directly answered this the other day by saying that it wasn’t something that the president had under consideration,” White House press secretary Robert Gibbs told reporters shortly before Obama spoke with CNBC.

After the interview, White House deputy communications director Jen Psaki said nothing has changed and the White House is “not considering” a VAT.

Many European countries impose a VAT, which taxes the value that is added at each stage of production of certain commodities.

When CNBC asked Obama whether he could see a potential VAT in this nation, the president said: “I know that there’s been a lot of talk around town lately about the value-added tax. That is something that has worked for some countries. It’s something that would be novel for the United States.”

“And before, you know, I start saying ‘this makes sense or that makes sense,’ I want to get a better picture of what our options are,” Obama said.

He said his first priority “is to figure out how can we reduce wasteful spending so that, you know, we have a baseline of the core services that we need and the government should provide. And then we decide how do we pay for that.”

Volcker has said taxes might have to be raised to slow the deficit’s growth. He said a value-added tax “was not as toxic an idea” as it had been in the past.

Since then, some GOP lawmakers and conservative commentators have said the Obama administration is edging toward a VAT.

Mind you, Obama has ALREADY broken his promise to the American people when he shoved his ObamaCare boondoggle through Congress by a reconciliation process which he strangely ALSO promised not to use (as I already pointed out above).  That’s because ObamaCare contains twelve new taxes on people Obama swore up and down he wouldn’t tax.

You see, the most profligate spender in the history of the entire human race has a problem: he’s spent so much money, even if he confiscated all the wealth of all the wealthiest people in the country, it wouldn’t scratch the surface in the debts he’s created.  So he needs to come after you and your family to pay his debts.

House Democrats Pass Worst Bill Ever To Destroy U.S. Health Care, Economy

Congratulations, America.  This is what you’ve “won”:

NOVEMBER 1, 2009

The Worst Bill Ever
Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all.

Speaker Nancy Pelosi has reportedly told fellow Democrats that she’s prepared to lose seats in 2010 if that’s what it takes to pass ObamaCare, and little wonder. The health bill she unwrapped last Thursday, which President Obama hailed as a “critical milestone,” may well be the worst piece of post-New Deal legislation ever introduced.

In a rational political world, this 1,990-page runaway train would have been derailed months ago. With spending and debt already at record peacetime levels, the bill creates a new and probably unrepealable middle-class entitlement that is designed to expand over time. Taxes will need to rise precipitously, even as ObamaCare so dramatically expands government control of health care that eventually all medicine will be rationed via politics.

Yet at this point, Democrats have dumped any pretense of genuine bipartisan “reform” and moved into the realm of pure power politics as they race against the unpopularity of their own agenda. The goal is to ram through whatever income-redistribution scheme they can claim to be “universal coverage.” The result will be destructive on every level—for the health-care system, for the country’s fiscal condition, and ultimately for American freedom and prosperity.

•The spending surge. The Congressional Budget Office figures the House program will cost $1.055 trillion over a decade, which while far above the $829 billion net cost that Mrs. Pelosi fed to credulous reporters is still a low-ball estimate.  Most of the money goes into government-run “exchanges” where people earning between 150% and 400% of the poverty level—that is, up to about $96,000 for a family of four in 2016—could buy coverage at heavily subsidized rates, tied to income. The government would pay for 93% of insurance costs for a family making $42,000, 72% for another making $78,000, and so forth.

At least at first, these benefits would be offered only to those whose employers don’t provide insurance or work for small businesses with 100 or fewer workers. The taxpayer costs would be far higher if not for this “firewall”—which is sure to cave in when people see the deal their neighbors are getting on “free” health care. Mrs. Pelosi knows this, like everyone else in Washington.

Even so, the House disguises hundreds of billions of dollars in additional costs with budget gimmicks. It “pays for” about six years of program with a decade of revenue, with the heaviest costs concentrated in the second five years. The House also pretends Medicare payments to doctors will be cut by 21.5% next year and deeper after that, “saving” about $250 billion. ObamaCare will be lucky to cost under $2 trillion over 10 years; it will grow more after that.

• Expanding Medicaid, gutting private Medicare. All this is particularly reckless given the unfunded liabilities of Medicare—now north of $37 trillion over 75 years. Mrs. Pelosi wants to steal $426 billion from future Medicare spending to “pay for” universal coverage. While Medicare’s price controls on doctors and hospitals are certain to be tightened, the only cut that is a sure thing in practice is gutting Medicare Advantage to the tune of $170 billion. Democrats loathe this program because it gives one of out five seniors private insurance options.

As for Medicaid, the House will expand eligibility to everyone below 150% of the poverty level, meaning that some 15 million new people will be added to the rolls as private insurance gets crowded out at a cost of $425 billion. A decade from now more than a quarter of the population will be on a program originally intended for poor women, children and the disabled.

Even though the House will assume 91% of the “matching rate” for this joint state-federal program—up from today’s 57%—governors would still be forced to take on $34 billion in new burdens when budgets from Albany to Sacramento are in fiscal collapse. Washington’s budget will collapse too, if anything like the House bill passes.

• European levels of taxation. All told, the House favors $572 billion in new taxes, mostly by imposing a 5.4-percentage-point “surcharge” on joint filers earning over $1 million, $500,000 for singles. This tax will raise the top marginal rate to 45% in 2011 from 39.6% when the Bush tax cuts expire—not counting state income taxes and the phase-out of certain deductions and exemptions. The burden will mostly fall on the small businesses that have organized as Subchapter S or limited liability corporations, since the truly wealthy won’t have any difficulty sheltering their incomes.

This surtax could hit ever more earners because, like the alternative minimum tax, it isn’t indexed for inflation. Yet it still won’t be nearly enough. Even if Congress had confiscated 100% of the taxable income of people earning over $500,000 in the boom year of 2006, it would have only raised $1.3 trillion. When Democrats end up soaking the middle class, perhaps via the European-style value-added tax that Mrs. Pelosi has endorsed, they’ll claim the deficits that they created made them do it.

Under another new tax, businesses would have to surrender 8% of their payroll to government if they don’t offer insurance or pay at least 72.5% of their workers’ premiums, which eat into wages. Such “play or pay” taxes always become “pay or pay” and will rise over time, with severe consequences for hiring, job creation and ultimately growth. While the U.S. already has one of the highest corporate income tax rates in the world, Democrats are on the way to creating a high structural unemployment rate, much as Europe has done by expanding its welfare states.

Meanwhile, a tax equal to 2.5% of adjusted gross income will also be imposed on some 18 million people who CBO expects still won’t buy insurance in 2019. Democrats could make this penalty even higher, but that is politically unacceptable, or they could make the subsidies even higher, but that would expose the (already ludicrous) illusion that ObamaCare will reduce the deficit.

• The insurance takeover. A new “health choices commissioner” will decide what counts as “essential benefits,” which all insurers will have to offer as first-dollar coverage. Private insurers will also be told how much they are allowed to charge even as they will have to offer coverage at virtually the same price to anyone who applies, regardless of health status or medical history.

The cost of insurance, naturally, will skyrocket. The insurer WellPoint estimates based on its own market data that some premiums in the individual market will triple under these new burdens. The same is likely to prove true for the employer-sponsored plans that provide private coverage to about 177 million people today. Over time, the new mandates will apply to all contracts, including for the large businesses currently given a safe harbor from bureaucratic tampering under a 1974 law called Erisa.

The political incentive will always be for government to expand benefits and reduce cost-sharing, trampling any chance of giving individuals financial incentives to economize on care. Essentially, all insurers will become government contractors, in the business of fulfilling political demands: There will be no such thing as “private” health insurance.
***

All of this is intentional, even if it isn’t explicitly acknowledged. The overriding liberal ambition is to finish the work began decades ago as the Great Society of converting health care into a government responsibility. Mr. Obama’s own Medicare actuaries estimate that the federal share of U.S. health dollars will quickly climb beyond 60% from 46% today. One reason Mrs. Pelosi has fought so ferociously against her own Blue Dog colleagues to include at least a scaled-back “public option” entitlement program is so that the architecture is in place for future Congresses to expand this share even further.

As Congress’s balance sheet drowns in trillions of dollars in new obligations, the political system will have no choice but to start making cost-minded decisions about which treatments patients are allowed to receive. Democrats can’t regulate their way out of the reality that we live in a world of finite resources and infinite wants. Once health care is nationalized, or mostly nationalized, medical rationing is inevitable—especially for the innovative high-cost technologies and drugs that are the future of medicine.

Mr. Obama rode into office on a wave of “change,” but we doubt most voters realized that the change Democrats had in mind was making health care even more expensive and rigid than the status quo. Critics will say we are exaggerating, but we believe it is no stretch to say that Mrs. Pelosi’s handiwork ranks with the Smoot-Hawley tariff and FDR’s National Industrial Recovery Act as among the worst bills Congress has ever seriously contemplated.

In 2008, America voted for national suicide, whether they understood it or not.  While it is increasingly obvious that Americans are rethinking their suicide pact with the Democrat Party, and beginning to change their minds, Democrats are nevertheless racing ahead to finish the job of destroying the country while they still can.

Think Cloward-Piven.  The Democrats believe that they are creating a “win we win, lose we win” stratagem.  If by some increasingly unlikely miracle our massive unprecedented debt-financed spending doesn’t cause the entire economic structure to implode, Democrats will be in a position to claim credit for their “success.”  If, far more likely, the economy self-destructs under the weight of the mind-boggling debts and economic hamstringing foisted upon us by the liberal agenda, Democrats are counting upon the fact that hungry, desperate, panicking people will turn to massive government structures to feed them and help them from the very problems that massive government structures caused in the first place.