VAT – Let’s Tax The Tea Party People!

On April 7, 2010, in VAT, by Dave

White House adviser Palu Volcker likes the idea of a VAT. He said, “We have to think about really revamping the tax system.” What’s to love about a VAT (value added tax) if you’re a money hungry government? Tea party folks are by-in-large not the wealthy, right? People with money (the rich) are simply disappearing from the rolls via every method possible, even renouncing US citizenship. Billions of dollars have fled the IRS permanently this way. While the US is seeking to pass legislation to rein in this activity by taxing at the time of transaction to foreign accounts, the rich are seeking ways to remove the dollar from their portfolio altogether. But, the US is poised to seek the best of the worst. According to, the US needs a “money machine.”

Enter the VAT.

What better way to punish the less wealthy who seem to be making the most irritating-to-government political noise?

It will take a while to implement but it moves us one step closer to being just like our failing European neighbors across the pond. (Greece has a general 19% VAT with some service category exceptions.)

Once in place, the government can ratchet up the rate as needed. 5%, 5.25% 9.3%… whatever.

Just 18 months ago Obama promised in his campaign, that the middle class earning under $250,000 would not see one dime of tax increase. The less you make, the greater percentage of your income you have to spend on goods and services. Instead of taxing the rich, the government can lay the burden of their increased spending directly on the backs of the working class- almost invisibly. How is this done? The VAT is imposed at every transaction, from component manufacturing to assembly to wholesale to retail. You could have four or more impositions of the VAT on everything without an ounce of paperwork. America can once more say, “Give me your tired, your poor… because we will tax them!” You can even tax the undocumented (among our poorest residents) and foreign nationals while they’re here. You can tax the struggling couple fighting to save their home as they sell off their assets to make ends meet. The possibilities are endless.

I suspect the VAT would represent a tax increase for most middle and lower class Americans. Don’t you? I suspect some kind of re-structured income tax would be paraded out as making it fair for everyone, giving the government the opportunity to increase tax on rich and poor alike by combining income tax with a new VAT system as well.

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