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
    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.
    Tags: obama, $, tax, will, percent, government, spending, debt
  • 46
    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
    Tags: tax, will, percent, $
  • 38
    As widely speculated, Republicans took control of the House of Representatives, picking up 61 seats, for a majority of 240-189. As of this writing, six House races still have not yet been decided as recounts persist.
    Tags: tax, percent, will, government, spending, cost
  • 36
    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.
    Tags: tax, government, $, debt, will, spending, increase, percent
  • 32
    What a year 2015 has been in Washington, D.C., and the world of politics! We have seen the resignation and retirement of the sitting Speaker of the House of Representatives. We have seen the incredible rise of “outsider” candidates in the Republican Presidential primary field. We have seen foreign affairs…
    Tags: washington, will, government

MASONRY MAGAZINE VIDEO NEWS

S26 HEPA Dust Extractor From Pullman Ermator

Ermator HEPA Dust Extractors are equipped with tested and certified HEPA filters that trap the smallest, most dangerous-to-breath dust particles and prevents them from being released in the air. A HEPA Dust Extractor not only exhausts perfectly clean air, it is far more efficient for the fast recovery of bulk dry dust, debris and other building materials found on every Construction, Abatement and Restoration job site.

Drilling and Chiseling Hammer Demonstration | CS Unitec

CS Unitec Drilling and Chiseling Hammer type 2 2414 0010 demonstration. For more information on the tools, drills and other products seen in this video, please visit: http://www.csunitec.com/hammer-drills/

PumpMaster | Masonry Grout Pump for Core Filling | Block Fill | Masonry Wall Grouting

The AIRPLACO PumpMaster PG-30 is shown on a jobsite in Nashville, TN with Masonry Contractor WASCO, Inc. ...