It must be Monday because here comes another broken promise from our fearless leader. Does anyone recall when Barack Obama was campaigning for President as a moderate? I know it’s hard to remember those days; especially since he has taken such a hard left since his inauguration but for those that know where to find the quotes, they are still out there. Try these on for size:
“You will not see any of your taxes increase one single dime.”
Barack Obama
“I will cut taxes - cut taxes - for 95 percent of all working families, because, in an economy like this, the last thing we should do is raise taxes on the middle class.”
Barack Obama
Since late last week, a lot of focus has been placed on suggestions made by Obama’s economic advisors that the Federal government should consider a value added tax or “VAT” tax. The VAT tax was popularized in Europe as a means to raise revenues to fund a plethora of social programs such as nationalized healthcare and other redistributive policies developed in European nations lead by Socialist political Parties. It allowed those nations to raise vast amounts of cash without the complication of having a direct tax on the public; which makes it all the more appealing to sneaky politicians.
The VAT tax levies a tax on each stage of manufacture. For instance, if you consider a book, most people can not imagine how many stages actually go into the manufacture of a simple book. To make paper you must harvest pulp trees. That step adds value to the wood simply because it has been harvested and delivered to a processor so therefore, it would be taxed. Then the paper manufacturer grinds the wood into a pulp to make paper, but first, chemicals are added to bleach the pulp and stabilize it and each of those chemicals began life as a raw material that had to be processed and refined adding value (and a tax) to each stage of development. Of course the energy used to operate the equipment runs on electricity which is generated using fuels. Those fuels are not ready for consumption until they have been processed, adding a value and the corresponding tax to that as well so the energy they produce is more costly to the paper manufacturer.
Now that the finished paper has been delivered to the printer, the actual work of creating a book can begin. The paper must be cut to a size that is usable for the book that will be produced, an added value. Then the ink that is used is another chemical that was delivered to the printer with all the taxes that were applied at each step of manufacture. The act of applying ink to the paper is another step that adds value and let’s not forget that a book bound for reading is more valuable than one that is not, so that adds another tax. There are glues that must be made to bind the book; a tax. There is card material that must be made to form the cover; another tax. There is the lithograph and cover material that is applied to the card-stock cover for yet another tax. In the end, a simple $15.00 book now costs $20.95 because of all the taxes added at each stage of production and for each of the materials involved.
Most areas of the country have a sales tax of roughly 8% and that would net about $1.20 on the sale of a $15.00 book. That is why the government would love to sell you on the idea of a VAT tax. If they had to come directly to you for a national sales tax, what could they possibly get away with? 1% or maybe 2% would be the most they could start with and not enrage a nation already drowning in taxes. Governments that have a VAT tax love tell everyone that this is a tax on those evil corporations and that they are finally paying their fair share but they leave out one tiny little detail. Corporations never pay taxes. Did I say never? Yes, I said NEVER. All taxes assessed on corporations, manufacturers and retailers are immediately passed on to the consumer (you) through higher prices so the government gets to tax you indirectly using the corporations as the tax collector. Neat trick huh? Through this practice that $15.00 book will have to go up by about $6, the price of a Kindle would increase by roughly $100 and an automobile; roughly $3,000. Oh yes, then you still have the honor of paying your local sales tax of about 8% on the new, higher price.
A VAT tax is not the tax on the wealthiest 1% that Obama campaigned on; it is a tax on anyone that buys anything regardless of income. Of course you can avoid that tax provided you have property with trees that you can cut down and the mineral resources to create ink, glue and paper with. Then of course you would have to know how to make those products yourself and find the time after all of that to have written something worth putting in the blank pages of the book you just made. No, I’m not being silly. I am trying to illustrate the fact that this type of tax is insidious, hidden and unavoidable. Even the poor need food, shelter and clothing and they will be burdened by the price increases on all of that just as much as the wealthiest 1% is. The hardest hit will be new families and the young that are just trying to make it on their own. They are the largest consumers of manufactured goods and none of them even come close to being in that “top 1%”.
A recent report stated that a full 47% of the nation currently pays no Federal income tax because of the Progressive Tax system we use in the United States. I doubt anyone is short sighted enough to imagine that we can have a $3.8 trillion dollar Federal budget, avoid collecting taxes from nearly half the nation and still be able to afford it. Of course if Obama was an honest man, which he isn’t, he would have to tell America that the freebies are over; that we must end the earned income credits and reduce the current amount to be eligible for a tax exemption or begin shutting down essential government services and programs. Unfortunately, the Democrats and Progressives have quite a few people trained to believe that these programs are not government charities but entitlements that they have a right to collect. Since they can’t eliminate the programs without riots springing up all over the country they have moved on to considering a VAT tax that would allow them to give with one hand while taking it back with the other hand hidden safely behind the companies that will have to collect the tax for them.
The institution of a VAT tax would be more than just another broken promise; it would be an outright lie. The tax would be collected from manufacturers that would, in turn, get the money from you while the President would still claim that he has not raised taxes on the middle class. Obama will still try to sell this to his base group of supporters as another tax on the rich and on those evil corporations knowing full well, by every example set in Europe, that the people that actually pay that tax are the ones that buy those products. To be able to claim that he is concerned about the deficit and debt, Obama has commissioned a debt reduction panel to investigate the problem and develop strategies for dealing with it. Every expert in the nation says that no plan will be effective without a meaningful reduction in government spending but that is where the agreement ends. The Progressive economists say those reductions must be coupled with massive new taxes dedicated to debt reduction while the ones that truly understand the power of a free market economy say we must slash taxes to attract foreign investment and to put money back into the hands of the consumer where it belongs. By the way, the report from Obama’s debt reduction panel is not due until December, well after the November election which is another neat little trick.
I know to those that have been raised in the era of class warfare, this idea seems ridiculous. You have been told since birth that the rich are too rich and the poor are getting poorer; that the rich must give more so that the playing field can be leveled to help the poor through these difficult times. I will be blunt. I have never sought out a poor man to apply for a job. While we all have different measures of what “filthy rich” actually is; the fact is that it is the wealthy that create jobs and I can think of no better way to help the poor out of poverty that to nurture a thriving economy that can support meaningful jobs for all of the people that are stuck in government projects now. The government has never created jobs. The best they can do is to steal from those that have to give to those that don’t. The only problem with that is the money they just stole was the money that would have been used to create businesses and new jobs.
Europe is about to implode under their mountainous debt and the wealthy in those countries are looking for a safe place to invest. They would much rather invest in the United States because we have the most stable society and government on the globe. Instead, they are seeking investments in China and others like China because America has gone wild with ideas of Socialism lately. If we can reign in our spending and slash taxes, money will pour into this country as never before. We can prosper and reemerge as a world leader if we have the strength to bite the bullet in the short term and grow our economy instead of sapping the last few drops of blood out of it. Of course we need leaders that understand the free market and wealth instead of those that despise it. This November will determine the course of America and if we don’t elect a roadblock to stop these runaway Progressive Socialists in Congress and in the Presidency, we may not get another chance to return America to prosperity and peace.
Paul
“You will not see any of your taxes increase one single dime.”
Barack Obama
“I will cut taxes - cut taxes - for 95 percent of all working families, because, in an economy like this, the last thing we should do is raise taxes on the middle class.”
Barack Obama
Since late last week, a lot of focus has been placed on suggestions made by Obama’s economic advisors that the Federal government should consider a value added tax or “VAT” tax. The VAT tax was popularized in Europe as a means to raise revenues to fund a plethora of social programs such as nationalized healthcare and other redistributive policies developed in European nations lead by Socialist political Parties. It allowed those nations to raise vast amounts of cash without the complication of having a direct tax on the public; which makes it all the more appealing to sneaky politicians.
The VAT tax levies a tax on each stage of manufacture. For instance, if you consider a book, most people can not imagine how many stages actually go into the manufacture of a simple book. To make paper you must harvest pulp trees. That step adds value to the wood simply because it has been harvested and delivered to a processor so therefore, it would be taxed. Then the paper manufacturer grinds the wood into a pulp to make paper, but first, chemicals are added to bleach the pulp and stabilize it and each of those chemicals began life as a raw material that had to be processed and refined adding value (and a tax) to each stage of development. Of course the energy used to operate the equipment runs on electricity which is generated using fuels. Those fuels are not ready for consumption until they have been processed, adding a value and the corresponding tax to that as well so the energy they produce is more costly to the paper manufacturer.
Now that the finished paper has been delivered to the printer, the actual work of creating a book can begin. The paper must be cut to a size that is usable for the book that will be produced, an added value. Then the ink that is used is another chemical that was delivered to the printer with all the taxes that were applied at each step of manufacture. The act of applying ink to the paper is another step that adds value and let’s not forget that a book bound for reading is more valuable than one that is not, so that adds another tax. There are glues that must be made to bind the book; a tax. There is card material that must be made to form the cover; another tax. There is the lithograph and cover material that is applied to the card-stock cover for yet another tax. In the end, a simple $15.00 book now costs $20.95 because of all the taxes added at each stage of production and for each of the materials involved.
Most areas of the country have a sales tax of roughly 8% and that would net about $1.20 on the sale of a $15.00 book. That is why the government would love to sell you on the idea of a VAT tax. If they had to come directly to you for a national sales tax, what could they possibly get away with? 1% or maybe 2% would be the most they could start with and not enrage a nation already drowning in taxes. Governments that have a VAT tax love tell everyone that this is a tax on those evil corporations and that they are finally paying their fair share but they leave out one tiny little detail. Corporations never pay taxes. Did I say never? Yes, I said NEVER. All taxes assessed on corporations, manufacturers and retailers are immediately passed on to the consumer (you) through higher prices so the government gets to tax you indirectly using the corporations as the tax collector. Neat trick huh? Through this practice that $15.00 book will have to go up by about $6, the price of a Kindle would increase by roughly $100 and an automobile; roughly $3,000. Oh yes, then you still have the honor of paying your local sales tax of about 8% on the new, higher price.
A VAT tax is not the tax on the wealthiest 1% that Obama campaigned on; it is a tax on anyone that buys anything regardless of income. Of course you can avoid that tax provided you have property with trees that you can cut down and the mineral resources to create ink, glue and paper with. Then of course you would have to know how to make those products yourself and find the time after all of that to have written something worth putting in the blank pages of the book you just made. No, I’m not being silly. I am trying to illustrate the fact that this type of tax is insidious, hidden and unavoidable. Even the poor need food, shelter and clothing and they will be burdened by the price increases on all of that just as much as the wealthiest 1% is. The hardest hit will be new families and the young that are just trying to make it on their own. They are the largest consumers of manufactured goods and none of them even come close to being in that “top 1%”.
A recent report stated that a full 47% of the nation currently pays no Federal income tax because of the Progressive Tax system we use in the United States. I doubt anyone is short sighted enough to imagine that we can have a $3.8 trillion dollar Federal budget, avoid collecting taxes from nearly half the nation and still be able to afford it. Of course if Obama was an honest man, which he isn’t, he would have to tell America that the freebies are over; that we must end the earned income credits and reduce the current amount to be eligible for a tax exemption or begin shutting down essential government services and programs. Unfortunately, the Democrats and Progressives have quite a few people trained to believe that these programs are not government charities but entitlements that they have a right to collect. Since they can’t eliminate the programs without riots springing up all over the country they have moved on to considering a VAT tax that would allow them to give with one hand while taking it back with the other hand hidden safely behind the companies that will have to collect the tax for them.
The institution of a VAT tax would be more than just another broken promise; it would be an outright lie. The tax would be collected from manufacturers that would, in turn, get the money from you while the President would still claim that he has not raised taxes on the middle class. Obama will still try to sell this to his base group of supporters as another tax on the rich and on those evil corporations knowing full well, by every example set in Europe, that the people that actually pay that tax are the ones that buy those products. To be able to claim that he is concerned about the deficit and debt, Obama has commissioned a debt reduction panel to investigate the problem and develop strategies for dealing with it. Every expert in the nation says that no plan will be effective without a meaningful reduction in government spending but that is where the agreement ends. The Progressive economists say those reductions must be coupled with massive new taxes dedicated to debt reduction while the ones that truly understand the power of a free market economy say we must slash taxes to attract foreign investment and to put money back into the hands of the consumer where it belongs. By the way, the report from Obama’s debt reduction panel is not due until December, well after the November election which is another neat little trick.
I know to those that have been raised in the era of class warfare, this idea seems ridiculous. You have been told since birth that the rich are too rich and the poor are getting poorer; that the rich must give more so that the playing field can be leveled to help the poor through these difficult times. I will be blunt. I have never sought out a poor man to apply for a job. While we all have different measures of what “filthy rich” actually is; the fact is that it is the wealthy that create jobs and I can think of no better way to help the poor out of poverty that to nurture a thriving economy that can support meaningful jobs for all of the people that are stuck in government projects now. The government has never created jobs. The best they can do is to steal from those that have to give to those that don’t. The only problem with that is the money they just stole was the money that would have been used to create businesses and new jobs.
Europe is about to implode under their mountainous debt and the wealthy in those countries are looking for a safe place to invest. They would much rather invest in the United States because we have the most stable society and government on the globe. Instead, they are seeking investments in China and others like China because America has gone wild with ideas of Socialism lately. If we can reign in our spending and slash taxes, money will pour into this country as never before. We can prosper and reemerge as a world leader if we have the strength to bite the bullet in the short term and grow our economy instead of sapping the last few drops of blood out of it. Of course we need leaders that understand the free market and wealth instead of those that despise it. This November will determine the course of America and if we don’t elect a roadblock to stop these runaway Progressive Socialists in Congress and in the Presidency, we may not get another chance to return America to prosperity and peace.
Paul
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