Tuesday, October 6, 2009

Hey! I don't make over $250K

Speaker Pelosi has suggested that the enactment of a Value Added Tax (VAT) be considered. From The Hill:
A new value-added tax (VAT) is "on the table" to help the U.S. address its fiscal liabilities, House Speaker Nancy Pelosi (D-Calif.) said Monday night.

Pelosi, appearing on PBS's "The Charlie Rose Show" asserted that "it's fair to look at" the VAT as part of an overhaul of the nation's tax code.

"I would say, Put everything on the table and subject it to the scrutiny that it deserves," Pelosi told Rose when asked if the VAT has any appeal to her.

The VAT is a tax on manufacturers at each stage of production on the amount of value an additional producer adds to a product.
Now I'm not one of these absolute anti-tax zealots. I believe there are legitimate functions of government at many different levels and carrying out those functions require revenue. I do believe, though, that the revenue ought to be generated in the most open and forthright manner; with full acknowledgement by our elected officials that what they are doing is confiscating money for the purpose of providing government services. Pelosi seems to agree, based on her, "scrutiny it deserves," comment.

Not so fast. The Hill ends its report with this:
The Speaker also emphasized that any reworking of the tax code would not result in an increase in taxes on middle-class Americans.
To think that a tax on manufacturers at each stage of production wouldn't ultimately be passed on to consumers, including middle-class Americans, strains credulity to the breaking point.

We may not call it a tax, which would allow President Obama to live up to his campaign promise not to increase taxes on those making less than 250 thousand dollars a year, but people will see increased costs of goods nonetheless.

This inability to trace out the consequences of legislation is an epidemic among our lawmakers and is one of the major reasons for our chronic crises, which inevitably lead to another round of legislative "fixes".

In the case of a VAT, the consequences seem so obvious that for someone of Pelosi's stature not to recognize them is frightening.

For a WI version of stealth taxation, see Dad29 on Doyle's Deceptions.

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