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The Obama Administration Considers a National Sales Tax

May 27, 2009

 Note: For the latest news on this issue please read this post from 08/07.

  There are some people in this administration that seem to be warming up to the idea of imposing a national sales tax on the American people to help us pay for the president’s “free” health-care plan. While it does seem to be a long shot at this point the idea is gaining momentum within the administration.

There is a growing awareness of the need for fundamental tax reform,” Sen. Kent Conrad (D-N.D.) said in an interview. “I think a VAT and a high-end income tax have got to be on the table

  Unfortunately Senator Conrad is not alone, Budget Director Peter Orszag has hired an advocate for a 10% national sales tax to help advise him on health-care. The man that he hired just happens to be Rahm Emanuel’s brother.

Orszag has hired a prominent VAT advocate to advise him on health care: Ezekiel Emanuel, brother of White House chief of staff Rahm Emanuel and author of the 2008 book “Health Care, Guaranteed.

   And if you still don’t believe that this idea is gaining momentum the president has hired Paul  Volcker, also a sales tax advocate, as the chairman of the task force that is studying the tax code.

Paul A. Volcker, chairman of a task force Obama assigned to study the tax system, has expressed at least tentative support for a VAT.

    And still, here is what a director of the Tax Policy Center had to say about fleecing the American people every time they make a purchase.

Everybody who understands our long-term budget problems understands we’re going to need a new source of revenue, and a VAT is an obvious candidate

  Notice how there is no mention of cutting any programs to help solve the deficit, only the idea of finding new revenues (taxes)? The idea of actually spending less money never even occurs to them; its always “how can we screw the taxpayers?” There is also no mention of this tax replacing another tax, it will be in addition to the taxes we already pay.

  This is still a long shot to happen, and it probably wouldn’t happen until after the mid-term elections, but the fact that the talk is there and seems to be gaining momentum is still problematic to those of us who believe that we should be able to keep the money that we earn and not be forced to subsidize the health-care plans of people who do not have health-care in addition to paying for our own health-care. Not to mention the adverse effect this will have on the economy. The last thing that a slowing economy needs is another disincentive for people to spend money. This tax will further cramp an already stalled economy.

   This is how these people operate, they float the idea and it seems like it will never go anywhere, but they never let up, they indoctrinate the people through aggressive campaigning and advertising and convince them that it is for the “common good.”  Eventually they get what they want.

I think interest is quietly picking up,” Graetz said. “People are beginning to recognize that the mathematics of the current system are just unsustainable. You have to do something. And a VAT has got to be on the table if you want to do something big and serious

  Once the mid-term elections are over we can expect to see this sales tax gain even more momentum as this president continues unprecedented deficit spending– the same type of spending that liberals railed against President Bush for. Only this president is spending at levels that have never been seen before.

  As P.J. O’Rourke once said if you think that health-care is expensive now, wait until it is free. Now we are beginning to see how much this “free” health-care is going to cost. I still can’t believe that a majority of Americans really and truly believe in or want to pay higher taxes. I refuse to believe that. Once word of this type of oppressive taxes gets out there I have to believe there will be a revolt at the ballot boxes. By the time that the chance comes to vote the usurpers out it may be too late to reverse the damage that has been done.

  Oh and if this idea ever does gain the momentum and is seriously considered and possibly even someday passed I just have one question. How will the president exempt that ninety five percent of Americans that he promised would see a tax cut? He won’t. He was never serious about cutting taxes on anybody. To quote a term that I heard once on a local radio station, he is a level three tax offender.

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37 Comments leave one →
  1. May 27, 2009 8:45 pm

    Liberals have never met a tax they didn’t like. The Obama administration is facing a big problem, they have many social programs they need to install while Obama is still riding a wave of popularity, only thing is that most Americans are tired of us going deeper and deeper into debt, so new sources of revenue must be found–taxing the rich and the so-called rich will not be enough. So American get ready for a floor of new taxes on everything.

    Like

    • Jimbo permalink
      May 28, 2009 4:35 am

      The trouble with retards, is that they are not aware that their retarded.

      Like

      • Deb permalink
        May 29, 2009 3:22 pm

        As far as they ar concerned, I don’t think being unaware is a problem. It is a blessing from God. Where do you think ignorance is bliss came from? i’m not trying to argue or be difficult, I’m just sayin’.

        Like

    • May 28, 2009 9:19 pm

      I am not sure, but I think that Jimbo just called you a retard. Maybe he was talking to me, I don’t know. Maybe I an just to stupid to understand.
      You are right though Ron, there are going to be all of these stealth tax increases that directly contradict the president’s promise.

      Like

  2. May 27, 2009 9:18 pm

    Wouldn’t this be a tax on money that was already taxed? Maybe they should tax us on the taxes we have withheld. They could call it a convenience fee for automatically handling it for us.

    Like

    • Vincent permalink
      May 28, 2009 12:49 pm

      Yes, it would be a tax on a tax. But we already pay tax on tax anytime we buy firearms, tobacco, alcohol and many other things. Please do not think that I am justifying taxation of taxed dollars, I vehemently oppose it and most taxes. I do acknowledge the necessity of a limited taxation to run the governments, but the excessive size and waste of our governments is uncalled for. Not to mention the misappropriation of much of the money that we shell out in excessive taxes.
      My point is that the establishment, party irrelevant, has already, well, established the practice of taxing taxes and we the people have allowed it to continue. Our inaction and compliance has made it possible and more likely to propagate until we just work and do the job that will be appointed to us, and the government will provide for our needs. As they see fit.

      Like

      • May 28, 2009 4:43 pm

        When that comes to pass, and it may well, I think I will be looking for greener pastures elsewhere. Maybe a nice third world country where I can hide out under an assumed name.

        Like

      • May 28, 2009 9:21 pm

        Robert, you won’t have to look for a third world country elsewhere, we are becoming one.

        Like

      • May 28, 2009 9:22 pm

        Amen VIncent!

        Like

    • May 28, 2009 4:40 pm

      Please don’t give these guys any more ideas. The are searching for a way to confiscate our entire income and give us a pittance of an allowance back.

      Like

    • May 28, 2009 9:21 pm

      Don’t give them any ideas.

      Like

  3. May 28, 2009 10:23 am

    Steve (Mr. Pink Eyes),
    I really enjoy your perspective and knowledge of facts and issues. I also write about similar stuff.
    I’ll be handing out info on the behind the scenes shenanigans of congress at a local farmer’s market on weekends to get people motivated to DO SOMETHING. I would like to know if you have any objection to my copying and handing out the article you wrote on the VAT? I will surely give you credit at the bottom of the article.
    I’d also like to add your blog site to mine.

    Thanks and keep up the good work.

    Bob DeMotte
    Spokane, WA

    Like

    • May 28, 2009 9:27 pm

      No problem at all Bob. Use my article post if you think it will help, that is what this is all about. I would really like it if you would include a link to my blog on the copies you hand out but it is not neccessary.
      Feel free to link to my blog, I will link to your blog and will be checking it out.

      Like

      • Deb permalink
        May 29, 2009 3:25 pm

        Wow! S.! Spokane. Cool. I’m glad there are some conservatives in WA.

        Like

  4. Deb permalink
    May 29, 2009 3:35 pm

    Yeah, tax cubed. Maybe I’ve been in the kool-aid, but if VAT makes the prices of goods go up, won’t this hurt the lower income people? Or is that just more of an excuse to continue welfare, and enrich it? It seems to me, that all the things that would actually improve the economy,(giving tax breaks to businesses, etc) are being willfully ignored and worse. How can it possibly help to make more people dependent on the govt? Everyone needs to read Common Sense. And re-read it. I was going to move to Texas, but now I’m thinking Montana. The weather here isn’t very summer-like anyway, so what’s the difference?

    Like

    • May 29, 2009 8:29 pm

      It would seem that this would hurt the lower classes more, maybe you are right and it means more welfare for them, which means even more taxes on the working class.

      Like

    • May 31, 2009 10:37 pm

      If they do add a VAT tax, I will be convinced that Obama is striving to destroy the middle class which will bring America to her knees.

      Like

      • June 1, 2009 4:36 am

        I am already convinced he is trying to destroy the middle class. He wants us more dependant on government.

        Like

      • June 1, 2009 7:31 am

        Both republicans and democrats are working to destroy the middle class. I have to wonder if people are just voting to determine what our fascism is going to be like.

        Like

  5. May 29, 2009 3:54 pm

    If they actually try this, it might be a window to force them to consider the fair tax.

    Like

    • May 29, 2009 8:31 pm

      The problem is that I believe this tax would be in addition to the taxes we already pay instead of in place of the taxes we already pay.

      Like

      • May 29, 2009 10:09 pm

        To do the fair tax properly, the 16th amendment would have to be repealed. What I am thinking is to demand that if they are going to go this route, then it should be via the fair tax.

        Like

      • May 30, 2009 6:55 am

        Now that would be much more acceptable. Have you ever seen the numbers on whether the average American would save or lose money with the fair tax? I have not. As you know, I am leery of all taxes and while the fair tax sounds like a good idea, it still scares me.

        Like

      • May 30, 2009 8:39 am

        To be honest, I am flat tax proponent. Compared to the status quo, fair tax is better. The proponents of fair tax claim people would save under it but the biggest benefit is you can control how much tax you pay by how much you spend. You can go pretty much tax free by not buying new items.

        My biggest complaints about it is that the system is carefully crafted to make sure that corporations do not pay any taxes. This can create a loophole that could allow people to not pay any taxes at all especially if we have an administration that chooses to not enforce the laws to audit companies. Also, I don’t think it fixes the problems that it claims to fix. As an example, while it gets rid of the IRS, it will be necessary for a new agency to be created for auditing companies for tax violations.

        Like

      • May 31, 2009 8:55 am

        It does seem to have benefits as well as some negatives. I haven’t looked into it enough to know.

        Like

      • May 31, 2009 10:51 am

        To answer you question, we would win and big for 3 reasons.

        1. Our paychecks, 100% would be ours to keep.

        2. We would only pay the consumption tax on NEW items thus if you wanted to avoid it you could purchase second hand.

        3. The system is transparent. When you pay for something, you see right there and then what you paid for.

        You can’t beat that. Can you imagine having your WHOLE paycheck to pay bills with? And yet we have those on the hill who are diligently working to take AWAY our WHOLE paycheck!

        Like

      • May 31, 2009 10:56 am

        Ooops! One other benefit. The prelate check that everyone would receive would cover necessities such as food.

        Here is another fact from page 141 – “The average income earner will get about a 50% increase in take home pay~!””

        Like

      • May 31, 2009 10:31 pm

        Yes, but what happens when someone’s medical bills exceeds the prebates? Unlike now, someone who can deduct medical expenses would be subject to higher taxes as medical care is taxed.

        Don’t get me wrong, the fair tax is by far a better system than the status quo. If given the choice between either status quo or fair tax, I would go with fair tax. However, I do not think that it would be worth the chaos of switching over for something that really does not solve all of the problems that it claims to solve. Plus, I am not convinced that if taken to the logical conclusions that it will not become a regressive system.

        Like

      • May 31, 2009 10:50 pm

        I don’t know how you can say it doesn’t solve a lot of our problems? Does it solve all of them. No, but then there is no plan that will do that.

        It does deal with the specific areas however which is more than our current system does.

        1. It is simple.
        2. It is Fair
        3. It is voluntary.
        4. It is transparent.
        5. It is border neutral.
        6. It is industry neutral.
        7. It is good for social security/medicare.
        8. It would do away with Federal Income Taxes, Payroll Taxes, Self-Employment Taxes, Capital Gains, Gift or estate taxes, corporate taxes, payroll withholding, no taxes on social security/pensions, no personal tax forms, no personal tax filing whatsoever.
        9. It would deal with the illegal aliens
        10. It would shrink the IRS, and on an on.

        As far as medical bills, in my opinion, that should not even be a tax issue. It should be a competitive issue. It should also be a responsibility issue.

        The problem now is insurance companies are in it for the money. They are not looking to protect us, help us but to line their pockets. Add competition to that such as the doctor in NY who devised a $79 a month medical association so people could pre-pay monthly for all their preventative care, and you would see prices go down. Also, get the government out of health care and you will again see major improvements.

        Like

      • June 1, 2009 7:28 am

        Health care in general is a beast of its own. It is like a hydra, there many problems and everyone is at fault; not just the politicians and health insurance companies. To truly fix it, it is also going to involve a culture shift by everyone (ie: the latest and greatest pill or treatment is not necessary). I don’t see changing the tax system is going to change that.

        Flat tax is simple and fair as well. Let me sum up my state income taxes: multiply your income by 3.4%. It takes only a fraction of the time for me to do my income taxes versus the federal taxes. What I would like to see is a complete reset; get rid of all of those other taxes and have just one.

        One of the problems that flat tax claims to solve is the government using the tax code to control the masses. I don’t buy that argument unless the system is implemented as an amendment. Washington can at a later time decide to play with the tax rates for certain industries. They can choose to revise the system such that food and medical will no longer be taxed. They can choose to increase the tax on sugary foods and sodas. They can lower the tax on goods from industries that they want to succeed. In the end, there will be a convoluted mess as there is now. The biggest selling point, from Boortz at least, does not really work.

        Like

      • June 1, 2009 9:48 am

        I would like to add to what I said. If Washington wants to go the route of a national sales tax, then it should be forced to do it via the fair tax (including the repeal of the 16th amendment).

        Like

      • June 1, 2009 8:53 pm

        That would be the only way that I would consider it acceptable at all.
        I have to admit that I just realized that you said you were a flat tax proponent, I thought you had written that you were a faix tax proponent. My bad.
        While the fair tax may be better than what we have now, I think that I would rather have a flat tax also. Although Dominique makes a great argument also.

        Like

      • June 1, 2009 4:24 am

        You might just talk me into jumping on board! The fair tax, that is. The plan being floated would be in addition to the taxes we already pay. Implementing the fair tax would be a major overhaul.

        Like

  6. bygracenotmerit permalink
    May 30, 2009 10:47 pm

    “Everybody who understands our long-term budget problems understands we’re going to need a new source of revenue, and a VAT is an obvious candidate”

    I for one DON’T understand nor do I believe it!

    You know (I’m going to be graphically blunt here) something? The constant barrage of spending and taxing and changing America that is being forced on us feels exactly how I felt when I was raped 20+ years ago! I have no control over the circumstances I am in and I am fighting with everything I have to survive!

    The speed at which Obama is working is overwhelming! You find yourself wondering where do your start? And then you find yourself angry w/your fists prepared to defend yourself.

    Then you realize, how do you defend yourself against all of this!? Geesh, some days you just want to cry!

    Like

    • May 31, 2009 8:43 am

      Sorry to hear about that. 😦
      Most of these longterm budget problems, while Bush had a hand in it, have been created by Obama in the first place. And now we are supposed to pay for it? Where does it stop?

      Like

  7. May 31, 2009 10:45 am

    My biggest complaints about it is that the system is carefully crafted to make sure that corporations do not pay any taxes. –

    Yes, but the question becomes, “Why would this be beneficial?”

    From page 50 in the FairTax book: ” […] if cutting corporate tax rates leads to economic GROWTH and NEW jobs, imagine what would happen if the FairTax were enacted and corporate taxes were cut to zero?”

    In summary, this is what the FairTax would do (from page 55)
    “[…] if we can eliminate taxes and capital and labor, and create a border-adjustable tax system that prevents our tax costs from being shipped overseas in the price of goods and services created in the United States, our country would become an eight-hundred pound gorilla. We would become unbeatable in the world marketplace. No longer would other nations, other economies, be taking business and jobs away from the U.S. economy by enacting their own valuable tax reform and simplification measures. As these nations have enjoyed steady gains, we have distracted ourselves with a cacophony of politicians, from both sides of the aisle, yammering about their favorite ideas for using our federal tax code to punish people they don’t like while rewarding people and industries they do.”

    The best part of the fair tax is the revenue it will bring in. (from pages 128-129).
    “Back to numbers: In 2005, total PERSONAL CONSUMPTION exceeded personal TAXABLE income by more than 70 PERCENT! Total personal consumption was $8.7 TRILLION, taxable income was $5.1 TRILLION (due to loopholes and exemptions).
    [….] According to Nobel-Prize-winning economist Milton Friedman…It seems to me that…if you have a system in which there were no exemptions, no special deductions, it would be…most likely to stay the same from year to year and not have the interventions (from our lovely politicians trying to garner votes – my addition 🙂 )

    One additional fact. It appears that states that have no personal income tax (relying instead on sales tax) have faster-growing economies than income tax states.

    I should stop here. I could go on and on.

    One last note, however. The current tax code we are under started out as a “FLAT tax for the rich!”

    Like

    • May 31, 2009 10:13 pm

      I would not say taxing corporations is beneficial but more for having them pay for their fair share. Do they not benefit from the national infrastructure such as interstates? Do they not benefit from police departments and fire departments? Do they not benefit from the military? Do they not benefit from Washington working to their benefit internationally? Let’s also remember that they have the same rights as an ordinary person.

      As far I am concerned, if they are going to receive the benefits and rights of a citizen, they can shoulder the same responsibilities. If Trustees of Dartmouth College v. Woodward and all related decisions get overturned and Jefferson’s proposed amendment for corporations is passed, then I’ll be more open to not taxing them.

      Also note, one fact that is minimized is that not all of the taxes that corporations pay can be passed on to the customer or reduced investment, some of it comes from the bottom line. This is because of how supply and demand works. The corporations cannot sell their goods for more than what the market can bear and in order to be competitive, companies cannot completely cut investment.

      “One additional fact. It appears that states that have no personal income tax (relying instead on sales tax) have faster-growing economies than income tax states.”

      It is debatable that the lack of an income tax is the reason because the ones with fastest growing economies are also the ones with the largest populations.

      I prefer the flat tax for a couple of reasons. First, it will not require a complete overhaul of how taxes are collected. All that would need to happen is to set the rate and eliminate the loopholes used to hide income. Second, under flat tax, everybody would be paying the same percentages of taxes from the poor to the wealthy and corporations. You cannot get any more fair than that.

      Like

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