RSS
TwitterFacebookGoogle+YouTubeLinkedIn

July 2010: Government Affairs

facebooktwittergoogle_plusredditpinterestlinkedinmail

Government Affairs

Tax Reform Ideas: Vanquish the VAT

As someone who has run a manufacturing company, I’ve seen the many stages of production that go into a finished product. I understand how taxing each stage of production will add to the end cost of the product, and how that will kill jobs and increase costs for families. That’s why I’m opposed to implementing a European-style value-added tax (VAT).

In simple terms, a VAT is an invisible type of national sales tax. Instead of being collected at the cash register, it is imposed on the value added at each stage of the production process. The VAT dramatically adds to the cost of everything from food and clothing to housing. For example, under a 15 percent VAT – the minimum standard amount allowed for members of the European Union – a $3.70 gallon of milk would sell for $4.30; a $2,000 MacBook Pro would cost $2,380. A 15 percent VAT would pump nearly $750 billion into the government’s coffers, taking thousands from every American family and raising production costs for manufacturers.

Adding a VAT to our current income tax code has been a hot topic among both the Obama Administration and Democrat leaders in Washington, D.C. Paul Volcker, the head of President Barack Obama’s Economic Recovery Advisory Board, recently said that a tax increase of some sort might be needed to deal with our growing record federal deficits and that a VAT should be considered. House Speaker Nancy Pelosi recently said that a VAT should be “on the table,” and President Obama himself recently said a VAT was a “novel” idea as a means to raise revenue. Novel? Perhaps. Right? Absolutely not.

What Mr. Volcker, Speaker Pelosi, and President Obama fail to address is the real issue: the unsustainable government spending by leaders in Washington.

Washington, D.C., has a spending problem, not a revenue problem. Instead of searching for ways to increase taxes and costs for taxpayers who are already enduring difficult economic times, Congress should be focused on reining in runaway government spending. We should not ask Americans to shoulder the burden of Washington’s wasteful spending, especially when Washington isn’t willing to make sacrifices in the first place.

The need to cut spending couldn’t be clearer. Since taking office 15 months ago, Washington Democrats have raised the debt from $10.6 trillion to $12.9 trillion (about $42,000 for every man, woman and child). In just two years, our national debt will be bigger than the size of our entire American economy (about $15 trillion).

The European experience with its VAT shows that, rather than closing deficits, a VAT only fuels new spending, taxes and debt. In the last decade, Greece ran a 5 percent annual budget deficit, despite having a 19 percent VAT. Today, Greece is bankrupt, with its national debt a full 25 percent larger than its economy. Greece’s response to this debt crisis has been to hike its VAT to 21 percent in March and 23 percent in May, with no end in sight.

American families make hard spending decisions every day to make ends meet, and so must the federal government. The last thing struggling families need is a new, invisible tax that will raise their costs of living, kill more manufacturing jobs and threaten our economic recovery.

 


Return to Table of Contents

Related Posts

  • 49
    December 2011 Government Affairs Legislative Committee Update By Congressman Allen West On Sept. 8, President Obama delivered his jobs agenda speech to a joint session of the United States Congress. I commend President Obama for finally making jobs his top priority after more than 33 months in office. However, I…
    Tags: obama, $, tax, will, percent, government, spending, debt
  • 46
    October 2010  Government Affairs The Value of Restoration Matthew B. Keelen and Michael J. Falencki As Congress returns at the beginning of September after being on summer recess for over a month, much of the attention is focused on the upcoming November elections. With attention to lagging jobs and economy…
    Tags: tax, will, percent, $
  • 38
    January 2011 Government Affairs Lame Duck: Wrapping up the 111th Congress Matthew B. Keelen and Michael J. Falencki Before November’s new Members of Congress officially begin their terms, the 111th Congress was attempting to finish legislation and adjourn for the year. The two issues most pressing – expiration of the…
    Tags: tax, percent, will, government, spending, cost
  • 36
    January 2013 Government Affairs Protecting the Middle Class From the Fiscal Cliff Congresswoman Ileana Ros-Lehtinen (R-Florida) This is a very critical moment in America, and I continue to be concerned over the plight of the hardworking middle class during these trying times. The effects of the looming fiscal cliff crisis…
    Tags: tax, government, $, debt, will, spending, increase, percent
  • 32
    November 2012 Government Affairs The Fiscal Cliff Stephen A. Borg We had another great and productive annual MCAA Midyear Meeting in Park City, Utah, from Sept. 12-14, 2012. Nearly 80 members of the MCAA made it to the Midyear Meeting, where we heard from MCAA Committee Chairmen and Chairwomen and…
    Tags: percent, will, tax, washington, $

MASONRY MAGAZINE VIDEO NEWS

Zachary Zuldema 1st Place (2nd Year) Winner Interview at the World of Concrete

Zachary Zuldema 1st Place (2nd Year) Winner Interview at the World of Concrete

Bill Dentinger 2015 Inductee MCAA Hall of Fame

Bill Dentinger 2015 Inductee MCAA Hall of Fame

John Smith, Jr.

John Smith, Jr. receives the 2015 MCAA C. DeWitt Brown Leadman Award

2015 MCAA Fastest Trowel On The Block Winner

2015 MCAA Fastest Trowel On The Block Winner

Daniel Furr 1st Place Winner

Daniel Furr 1st Place Winner (First Year), Masonry Skills Challenge

Synpro Products

Masonry Magazine Video News Interview: Michael Goyne

Hydro Mobile Inc

Interview with Kevin O'Shea of Hydro Mobile, Inc.

Interview with Mark Kemp – Chairman, MCAA

Interview with Masonry Contractors Association of America Chairman, Mark Kemp

Mortar Net Solutions

Interview with Steve Fechino from Mortar Net Solutions

Pullman Ermator

Interview with Lyndon Kelsey of Pullman Ermator

Keene Building Products

Interview with Jim O'Neill of Keene Building Products