Here we go: Top WH advisor says it’s time to start thinking about a VAT

posted at 10:04 pm on April 6, 2010 by Allahpundit

We all know it’s coming, but I’m reasonably sure Volcker missed a memo instructing advisors not, repeat not, to mention this publicly until, oh, say, the day after Election Day 2012.

As it is, look for Gibbsy’s spin tomorrow to be, “B-b-but he was Reagan’s Fed chairman!”

Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax “was not as toxic an idea” as it has been in the past and also said a carbon or other energy-related tax may become necessary.

Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves. “If at the end of the day we need to raise taxes, we should raise taxes,” he said.

Krauthammer’s column on the VAT came out a few weeks ago, but if you missed it at the time, now’s your chance to catch up. Perfection:

Obama set out to be a consequential president, on the order of Ronald Reagan. With the VAT, Obama’s triumph will be complete. He will have succeeded in reversing Reaganism. Liberals have long complained that Reagan’s strategy was to starve the (governmental) beast in order to shrink it: First, cut taxes — then ultimately you have to reduce government spending.

Obama’s strategy is exactly the opposite: Expand the beast, and then feed it. Spend first — which then forces taxation. Now that, with the institution of universal health care, we are becoming the full entitlement state, the beast will have to be fed.

Precisely. The One’s perverse insight was that a giant federal expansion of health-care benefits had to be passed before any major entitlement reform could happen. Had he tackled the latter problem first, declaring that America had reached a moment of fiscal emergency and demanding that both parties address the crisis, he would have done his country a world of good but in the process created two problems for himself. First, the political fallout to his party from cutting entitlements likely would have been devastating, which would have wrecked any chance at passing health-care reform aside from a modest GOP bill. And second, even if the Democrats survived the electoral backlash, they’d have a hard time trying to sell the idea of a brand new entitlement after the country had sacrificed so much to get its fiscal house in order. No, the only way to get O-Care done was to add it to the entitlement basket first and then wait for dependency to work its magic so that, when the crisis finally hits full force, it’s already a fact of life. That was a fantastically reckless thing to do but he wanted his agenda passed at all costs. And I do mean “all costs.”

I’ll leave you with James Pethokoukis’s piece this morning gaming out a way that the Democrats might try to sell the VAT to the public. Essentially, it’d have to be the fiscal equivalent of comprehensive immigration reform: If the public’s going to be asked to accept the bitter in the form of amnesty or new taxes, it had better get the sweet of border enforcement or fiscal responsibility in the same deal.


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bayam on April 7, 2010 at 12:03 AM

Look dude, you can really make it sound good, but 25% of $50k is $12,500 and 15% of say $1,000,000 is $150,000. Now it doesn’t take a rocket scientist to figure out the bigger number here, so what Warren Buffett was peddling was a big stinking load of BS, just like your load. Clinton was an excellent parser, you know, “what the meaning of ‘is’ is”. When you start parsing you lose the attention and the effect of have a cogent argument. You can convince yourself, but I doubt you convince anyone other than a true believer or a ‘Kool-Aide’ cannibal.

belad on April 7, 2010 at 12:19 AM

I can’t remember exactly when, but Obama said that he thought we should have the VAT in ADDITION to the existing tax structure.

Laura in Maryland on April 7, 2010 at 12:00 AM

We don’t give them both. They don’t have sixty in the senate anymore, and if they tried reconciliation, then we don’t have the votes to stop it anymore than we had the votes to stop health care, so it’s a moot point. We offer them bipartisan support to create a VAT/sales tax/flat tax in exchange for the dismantlement of the progressive income tax. They can feed the government or feel the hunger pains, but they can’t have both, at lest not with GOP support.

DFCtomm on April 7, 2010 at 12:20 AM

belad on April 7, 2010 at 12:19 AM

Numbers don’t matter to Axelrod’s paid trolls. As long as he gets his check and pizza he’s cool.

tetriskid on April 7, 2010 at 12:26 AM

so what Warren Buffett was peddling was a big stinking load of BS

Didn’t you read the original comment? Buffet said that he paid less INCOME TAX than his secretary, which is true. Buffet is usually addressing a finance savvy audience that understand the difference between capital gains tax and income tax.

bayam on April 7, 2010 at 12:27 AM

We interrupt for a dose of reality:
http://www.youtube.com/watch?v=QdKmc9aBELM

onlineanalyst on April 7, 2010 at 12:28 AM

bayam on April 7, 2010 at 12:27 AM

Yes I read it and heard it, and YES he was ‘parsing words’ at the time to garner favors from ‘Teh One’.

belad on April 7, 2010 at 12:34 AM

bayam on April 7, 2010 at 12:27 AM

Stupid troll is stupid.

tetriskid on April 7, 2010 at 12:35 AM

Stupid troll is stupid.

tetriskid on April 7, 2010 at 12:35 AM

I don’t agree with him at all, and he is ignoring my question about the dip in 1995, but bayam is debating the issue with a very reasonable demeanor and is in no way shape or form a “troll”.

Save it for the real dbags that come along.

ClassicCon on April 7, 2010 at 12:40 AM

bayam on April 6, 2010 at 11:04 PM

Warren Buffett knows how to read markets; he’s not an economist. In case you haven’t noticed, the market doesn’t always accurately reflect what’s going on in the economy. It reacts to sudden events, like airplanes flying into buildings, but when the frog is being boiled slowly — not so much. If Wall Street is so chock full of economic geniuses, why are the banks coming to the government for a handout?

NoLeftTurn on April 7, 2010 at 12:42 AM

bayam on April 6, 2010 at 11:33 PM

Deficit spending increased during the Reagan/Bush years not because of tax cuts but because Congress refused to cut spending. Revenues during the Reagan years especially were plentiful. Perhaps less than the Clinton years, but double what they were on average in the 70s. And tax revenues during Bush 43′s term dwarfed those of the Clinton years. Also, you’d do well to note that a conservative Congress elected in 1994 kept Clinton a short spending leash, and unlike this socialist joker in the White House now, he governed as a centrist.

This isn’t rocket science; I don’t know why you’re making it so complicated.

NoLeftTurn on April 7, 2010 at 1:00 AM

If Wall Street is so chock full of economic geniuses, why are the banks coming to the government for a handout?

Buffet predicted the slowly emerging problems inherent in derivatives and the rising deficits (public and trade) of the last 5 – 10 years more accurately than anyone in the public arena. Correct me if I’m wrong.

I’m not defending the many sleazebags on Wall Street. But Wall Street has more finance smarts than politicians and their pet ideologies. On Wall Street, people who want to push an ideology generally fail, because money is all that matters at the end of the day. If you can’t deliver results, then your Wall Street career is over. That’s why companies like Goldman Sachs have both Dems and Republicans serving as CEO over time- it’s the best man who ends up at top. Not so in DC.

bayam on April 7, 2010 at 1:05 AM

First, Washington would have to demonstrate it could manage the public purse by reforming entitlements in a Ryan-esque manner.

No, lets go for something much easier to start with. Baby steps.

Make me a hovercar that runs on dreams.

We’ll work our way up to his requirement eventually.

gekkobear on April 7, 2010 at 1:07 AM

Convincing Americans that we need to be more like Europe was a great trick that the liberals have pulled off.

WisCon on April 7, 2010 at 1:19 AM

When you remove the death tax on all income over $2 mil, yes a lot of rich people will give it away instead of leaving it to their sniveling little offspring. But that’s generally considered a good thing. No one ever said that Rockefeller or Carnegie had hearts of gold but their impact has been tremendous.

bayam on April 7, 2010 at 12:16 AM

Go back and read your IRC. The Bush death tax cuts sunset next year. The ceiling will drop back to $1 million and call me cynical, but I’m not seeing this regime raising the limits or lowering the rates anytime soon. In fact, if you have money and you’re going to die, this is the year to do it.

Call someone with a million dollars “rich” if you want to, but it will affect a LOT of Americans going forward. Many people have half that in net worth in just their residence alone. And much of this wealth that’s being bequeathed has already been taxed at some point down the line. What about the principle of no double taxation? And what do you say to the third-generation American whose parents and grandparents worked their fingers to the bone to scrimp and save so they could buy penny stocks and savings bonds and diligently over the course of a lifetime, amass a couple of million dollars so that their heirs might have an easier life than they did? You think telling these folks they need to pony up half a million dollars to Uncle Sam is fair?

The death tax is unconscienable IMO. The insanely wealthy already have all of their money sheltered from the tax man. It’s ordinary Americans who have worked hard and been responsible their whole lives who always get the shaft.

NoLeftTurn on April 7, 2010 at 1:20 AM

Can you feel the hands around your throat yet?
Have you felt the sting of the back of his hand?
I can. I have.
Neuter in November…

Army Brat on April 7, 2010 at 1:21 AM

This isn’t rocket science; I don’t know why you’re making it so complicated.

NoLeftTurn on April 7, 2010 at 1:00 AM

If you need to politicize facts, then you’re going to see reality through a colored lens. The tactic of blaming Congress for budget problems is always a cop out, given the power of today’s executive branch. And you’re selectively blaming Congress, since you fail to recognize that Republicans in Congress went on a spending spree during the Bush years, driving up the size of the fed budget by 30%. (If it’s even fair to blame Congress for Bush’s spending.)

Yes, Bush had high bubble economy tax revenues, helped by by deficit spending that was never sustainable. Most people considered ‘objective’ about our budget history would say that Bush takes most of the blame for the debt and deficit:
http://finance.yahoo.com/tech-ticker/bush-administration-%22the-least-fiscally-responsible-in-history%22-budget-hawk-says-457944.html

You can’t pin all the blame on one party. But we do know at a high level that Bush generally believed that “deficits dont matter” while the stated goal of Robert Rubin and others under Clinton was to eliminate the budget deficit. The fiscal outcomes seem to correlate to their priorities (and not to which party held sway over Congress).

bayam on April 7, 2010 at 1:23 AM

Buffet predicted the slowly emerging problems inherent in derivatives and the rising deficits (public and trade) of the last 5 – 10 years more accurately than anyone in the public arena. Correct me if I’m wrong.

I was predicting the same thing, and I’m not exactly a financial wunderkind. This is common sense; it doesn’t demonstrate any sort of wonky grasp of economics. Just because some people were content to ignore the writing on the wall so long as they were making a lot of coin in the short term doesn’t mean no one knew what was coming.

NoLeftTurn on April 7, 2010 at 1:26 AM


**********************************
* BRING IT ON !!!!! *
**********************************

NOTHING BETTER THAN A TAX THAT WILL HIT **EVERYBODY** AND NOT JUST THE “RICH”

NOTHING BETTER THAN A TAX THAT WILL MAKE **EVERYBODY** ANGRY AND FUME

NOTHING BETTER THAN A TAX THAT WILL RUB EVERYONES NOSE IN THE CONSEQUENCES OF “HEALTH-INSURANCE-BUT-NO-LONGER-HEALTHCARE” AND OBAMA-ECONOMICS WHENEVER SOMETHING IS BOUGHT

AND ONCE OBAMA AND ALL OTHER CORRUPT OR MORONIC POLITICIANS ARE TARRED AND FEATHERED AND DRIVEN OUT OF DC, IT WILL BE MUCH EASIER TO FINALLY IMPLEMENT A FLAT TAX.

THIS TIME, THE UNINTENDED CONSEQUENCES WILL WORK FOR US.

mooseburger on April 7, 2010 at 1:38 AM

bayam on April 7, 2010 at 1:23 AM

It’s pretty ironic that you talk about politicizing facts; you’re the one relying on examples from prior administrations to make your points, however specious they may be.

Anyway, that said, you won’t find me defending Bush 43′s domestic spending agenda. However, we were prosecuting a war for much of his term. You say you think deficit spending is warranted under some circumstances — does fighting a war qualify? It does for me, but then I’m a conservative and national security is actually a priority for me.

Further to which, even if Bush did overspend, Obama’s spending in just one year has dwarfed his numbers. A picture speaks a thousand words. This whole tu quoque argument has pretty much lost any credibility at this point.

And last time I checked, Congress was in charge of the purse strings. Hence why Reagan was such a passionate proponent of the line item veto. It doesn’t do much good for a fiscally conservative president to send a fiscally conservative budget to a spendthrift Congress. Esp. one as rigidly ideological as the one we’ve got right now. People have to be willing to compromise and negotiate and no one in the Democrat Party is exhibiting those traits these days.

NoLeftTurn on April 7, 2010 at 1:40 AM

We offer them bipartisan support to create a VAT/sales tax/flat tax in exchange for the dismantlement of the progressive income tax. They can feed the government or feel the hunger pains, but they can’t have both, at lest not with GOP support.

DFCtomm on April 7, 2010 at 12:20 AM

This is exactly what I’d like to see happen. Republicans can’t lose with this position, I don’t think. And when the Democrats balk, they can say, “Look, voters, we’re trying t be bipartisan and compromise with them, but they’re not interested. They just want to tax you more.”

I’d prefer a fair tax to a VAT, but either way, get this issue out there in front of the people. So few even know about it that if the media were to start covering it, they’d be forced to learn something. I don’t know how you convince the 50% who are currently not paying any tax at all, but the 50% who are tend to be the ones who are politically active and vote. We just have to make sure ACORN isn’t busing homeless people to the polls to vote three or four times.

NoLeftTurn on April 7, 2010 at 1:47 AM

New video of U.S. military gunning down civilians in Iraq.

They had no RPGS, no weapons, and were not insurgents.

Spathi on April 7, 2010 at 2:14 AM

No, they are dead mofos. Tough.

SurferDoc on April 7, 2010 at 2:20 AM

As it is, look for Gibbsy’s spin tomorrow to be, “B-b-but he was Reagan’s Fed chairman!”

I almost missed this, B-b-but he was Carter’s Fed chairman…at the suggestion of SecTreas Alan Greenspan, if my poor tired memory serves correctly.

Laura in Maryland on April 7, 2010 at 2:27 AM

You can’t pin all the blame on one party. But we do know at a high level that Bush generally believed that “deficits dont matter” while the stated goal of Robert Rubin and others under Clinton was to eliminate the budget deficit. The fiscal outcomes seem to correlate to their priorities (and not to which party held sway over Congress).
bayam on April 7, 2010 at 1:23 AM

If 136B deficits don’t matter, then deficits 10x that REALLTVdon’t matter, right, Bayam, you babbling imbecilic Obamaton.

Chuck Schick on April 7, 2010 at 2:55 AM

Read my lips- No more taxes!

gdonovan on April 7, 2010 at 6:00 AM

If the issue becomes a VAT before November the GOP takes the Congress for the most obvious reason of all: Health Care was supposed to pay for itself!

rob verdi on April 7, 2010 at 6:13 AM

The only up-side, if there is one, is that libs who love Obow are going to get soaked, too. A VAT is regressive; so much for liberal compassion when the poor are paying $12 for something worth only $10. Then add in market-based inflation which is soon to come, and we have their Utopia!

While I rather every American be a millionaire, I find myself almost lusting to hear the libs whine when their joker in the WH lets them keep only $1.50 out of every $10 they earn.

Liam on April 7, 2010 at 6:54 AM

Top WH advisor says it’s time to start thinking about a VAT

Where is there a “top WH advisor” who will say, “Hey, maybe this government is too bloated and a drag on the economy. Let’s figure out what things this government MUST do under the Constitution and jettison the rest. We may have to educate the voting public about why this is, but isn’t that our job?”

Where is that person?

Why is “feed the bloat” the default starting point?

ya2daup on April 7, 2010 at 6:55 AM

Obama’s strategy is exactly the opposite: Expand the beast, and then feed it. Spend first — which then forces taxation.

Bush already did exactly that. Massively increased the size of the federal government while drastically lowering taxes on the wealthy. And it’s not clear when, if ever, the country will be able to recover.

You need to realize that even if Obama held spending flat, this country will still be up the creek. The structural deficit stands at nearly $1 trillion- when you account for bubble economic growth / tax revenue before ‘08 that will never return. There’s no easy way out, no proven formula for dealing with this disaster.

bayam on April 6, 2010 at 10:36 PM

Deficits under Obama are six times Bush’s worst. Unemployment under Bush was twice as good as under Obama. Bush spent too much, but was a piker compared to Obama. And if you look year by year, Bush came into office with the dot com bust, followed by 9/11, and still managed to improve the economy. Until the Democrats took over Congress, when all the bad economic news started happening.

I know you’re trying to blame Bush so you can absolve Obama. But that dog won’t hunt. All it does is reveal your dishonesty.

didymus on April 7, 2010 at 6:56 AM

didymus on April 7, 2010 at 6:56 AM

The Bush tax cuts brought the Treasury’s greatest quarterly revenues in history in Sept. 2007–more than a trillion dollars. Tax cuts work, they actually increase revenue. Libs just don’t get that despite all the evidence.

Liam on April 7, 2010 at 7:03 AM

VAT

V – veracious spending

A -announce crisis

T – tax the blazes out of the fools

Don L on April 7, 2010 at 7:16 AM

Doesn’t a VAT tax target the poor disproportionately, who are presently paying no income tax?

Is this the change Obama promised for America? Why wait -call it the “Tax on the Poor?”

Don L on April 7, 2010 at 7:21 AM

Spathi, that video reminds me of videos taken by Arabs living in Israel(“Palestinians” to anyone not familiar with history)where the “Palestinians” film all their dead that the evil Israelis have shot in cold blood, only to get up and run off after the cameras have stopped rolling.

Same thing with this crap. There is no context as to what the mission was, who was being liquidated, or any context to what’s in that clip.

You see the comments after and it’s the same old Progressive Socialist garbage of “America bad, we’re the worst country in the world,etc…” I’ve never seen people with so much self hate as Americans suffering from so much guilt in being Americans. I don’t know why moonbats don’t just move to Canada where there is already a Socialist government in place. Stop spreading lies about the American serviceman. It’s resulted in many American servicemen being killed now in Afghanistan as the Rules of Engagement put in by Obama and Code Pink are so restrictive on our boys and gals they can’t even fight the wars. History will punish the leftist statists harshly. They’ll be right up there with Stalin, Hitler and Mao…..

If the lefties are so concerned about innocent civilians, why is there no reporting of the slaughter of hundreds of South African Boers(white farmers)by the communist regime of Nelson Mandela? It’s racial genocide that will never see the light of day on MSNBC….

adamsmith on April 7, 2010 at 7:24 AM

Doesn’t a VAT tax target the poor disproportionately, who are presently paying no income tax?

Is this the change Obama promised for America? Why wait -call it the “Tax on the Poor?”

Don L on April 7, 2010 at 7:21 AM

It’s totally regressive, in that it artificially inflates prices over and above normal market forces.

The expected figure is about 20%, so when the poor buy something worth $10, they’re going to pay $12 for it. Plus maybe sales tax, too–in $12 and not on the original $10 ‘value’.

Liam on April 7, 2010 at 7:27 AM

Boy, those banksters sure do show their true colors don’t they. Volcker is just part of the socialist bankster cartel.

Central bankers own the U.S.

True_King on April 7, 2010 at 7:37 AM

Obama’s strategy is exactly the opposite: Expand the beast, and then feed it.

Revelations?

Chip on April 6, 2010 at 10:13 PM

The 1st beast refers to the one world political system.

True_King on April 7, 2010 at 7:40 AM

The 1st beast refers to the one world political system.

True_King on April 7, 2010 at 7:40 AM

It’s coming. The Book of Revelation is happening right before our eyes.

Liam on April 7, 2010 at 7:42 AM

getting entitlement costs and the U.S. budget deficit under control may require such moves.

Hey, a$$wipe, how about getting rid of some entitlements and stop blowing our money on bailouts? That would solve the problem.

boomer on April 7, 2010 at 7:55 AM

It’s coming. The Book of Revelation is happening right before our eyes.

Liam on April 7, 2010 at 7:42 AM

bzzzt. Sorry, thanks for playing though. The book of Revelation has already been fullfilled as it was a prophecy about the destruction of Jeruselem.

boomer on April 7, 2010 at 7:56 AM

boomer on April 7, 2010 at 7:56 AM

OK

Liam on April 7, 2010 at 8:26 AM

Expand the beast, and then feed it.

When is enough enough? Is there a tipping point somewhere?

petefrt on April 7, 2010 at 8:26 AM

When is enough enough? Is there a tipping point somewhere?

petefrt on April 7, 2010 at 8:26 AM

If New Jersey is any indication, we’re real close. The people of New Jersey elected Christie to stop the runaway taxation and union influence. Obama and his horde have picked the wrong time to impose their progressive agenda. They will be fought tooth and nail.

But of course the most visible indicator of our proxinity to a tipping point is the tea party. People everywhere are sick of spending, taxes and government programs.

darwin on April 7, 2010 at 8:51 AM

Well sure, the tipping point will be when other countries stop bailing us out. At some point the calculus for China will tell them to stop buying. At that point most likely there will be a massive land-war, because their economy will need something to produce, and with the resultant destruction of the dollar, American’s won’t be buying Chinese merchandise.

kerncon on April 7, 2010 at 8:51 AM

At the end of the day–they could cut Fed jobs and spending.
the thing about a VAT is that everybody pays, even the folks that heretofore have paid no taxes at all. But since they’re Feds, they will not try to off set it in other ways and when they get the money they will spend it carelessly. We really do have to do something about our government, it’s way out of control.

jeanie on April 7, 2010 at 8:59 AM

bayam on April 6, 2010 at 10:52 PM

Goodness! You certainly have been paying attention at the lefty talking points lessons offered at your local [place formerly named ACORN] office, haven’t you?!

stvnscott on April 7, 2010 at 9:11 AM

We really do have to do something about our government, it’s way out of control.

jeanie on April 7, 2010 at 8:59 AM

What we have is essentially a rogue government. The passage of the health care monstrosity is a clear example. Also, the efforts by this administration to prevent us from accessing our abundant energy reserves, when they belong to us, not democrats, is another indication of a rogue government at work.

darwin on April 7, 2010 at 9:11 AM

Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves.

The regime has no interest in getting entitlement costs under control.
When are Americans going to wake up and notice that rich, entitled, corrupt career politicians are robbing us blind, while they exempt themselves and escape without consequence.
Those who will pass a bill like this have ALL amassed wealth beyond the imagination of most Americans, and these disastrous policies will have little effect on them. Do you think that if they earned the average salary in America and were subject to the same laws as the rest of us that they would continue to heap more and more levies, taxes and fines upon us?

maryo on April 7, 2010 at 9:26 AM

Uncle has got to pay for all this free stuff somehow. Raising and starting new taxes is what they do best. It sure ain’t keepin’ national security secrets or gettin’ the country goin’ in the right direction.

Kissmygrits on April 7, 2010 at 9:34 AM

The whole country will be the ‘Big Easy’ now won’t it? We’ll all be sitting around eating potato chips and watching TV all day. Who will be designated to work to make the tax money? A lottery?

Now Colin Powell talked that one person can’t ruin a country. Well they sure as hell can. SADDAM did it, and now B.O. is doing it. Thing is he’s not doing it alone. He has help. With hte whole healthcare fight behind him this guy is running us full speed back in time 50 years.

johnnyU on April 7, 2010 at 10:20 AM

VAT proposed… poor and minorities hardest hit.

It is an extremely regressive form of taxation.

I assume this is Obama’s aim to unite the country… against him. Because this takes dead aim at the last holdouts of his support and once it gets out just how regressive this sort of tax is, he will have done his job of getting everyone mad at him simultaneously.

ajacksonian on April 7, 2010 at 10:20 AM

bayam on April 7, 2010 at 1:23 AM

Not to belabor it, but Clinton had a bubble too. I remember sitting in a venture capital meeting for a software company I was advising back in April 2000; you could pretty much time the moment the bottom started to fall out.

And for all the supply-siders — it’s always and everywhere an empirical question. Not even Mr. Laffer postulated that the tax-rate elasticity of the tax take would always mean you could raise revenues by cutting rates. It’s not an iron rule.

DrSteve on April 7, 2010 at 10:22 AM

Sharia finance and tax
You share or else.

seven on April 7, 2010 at 10:32 AM

I’m thinking of a VAT of tar to coat these Democrats in, after which they’d have feathers blown on them.

Ward Cleaver on April 7, 2010 at 10:36 AM

It’s totally regressive, in that it artificially inflates prices over and above normal market forces.

The expected figure is about 20%, so when the poor buy something worth $10, they’re going to pay $12 for it. Plus maybe sales tax, too–in $12 and not on the original $10 ‘value’.

Liam on April 7, 2010 at 7:27 AM

So, the year it goes into effect, we get 20% inflation. Barack Obama, the reincarnation of Jimmuh Carter on steroids. Stagflation, the explosion of malaise and the misery index. Been there, done that, no likey.

From his shining city on a hill, Ronald Reagan needs to anoint a successor.

Steve Z on April 7, 2010 at 10:49 AM

From Pethokoukis’s piece:

Yet there is a reasonable scenario where America would accept a VAT. In fact, it is the only scenario under which we should accept a VAT.

First, Washington would have to demonstrate it could manage the public purse…

Well, there’s your problem, right there…..

Vashta.Nerada on April 7, 2010 at 10:59 AM

How else are we going to be able to afford all those abortions for illegal aliens?

SurferDoc on April 7, 2010 at 11:25 AM

This was really hard to predict, European Socialism requires European VAT crippling tax to keep the people down.

tarpon on April 7, 2010 at 11:42 AM

We only need to hold it back till November.

Akzed on April 7, 2010 at 11:56 AM

We only need to hold it back till November.

Akzed on April 7, 2010 at 11:56 AM

Wrong, we need to hold it back till January. The lame duck deomocrats will still try to push it through after they have been voted out.

agmartin on April 7, 2010 at 12:06 PM

When the VAT becomes law, we should all thank Charles Krauthammer. Just as “only Nixon could go to China”, it had to be a conservative who pitched the VAT and made it a legitimate policy proposal. Others will say Krauthammer was warning us, but if you read his article or watch his interview from the week after Health Care passed, you’ll notice that he says “it’s inevitable”, “it’s necessary”, and “it’s coming”, but never, “this is what the Democrats are going to try next”. These beltway pet Republicans are not to be trusted, ever.

joe_doufu on April 7, 2010 at 12:12 PM

Bush already did exactly that. Massively increased the size of the federal government while drastically lowering taxes on the wealthy. And it’s not clear when, if ever, the country will be able to recover.

bayam on April 6, 2010 at 10:36 PM

Yes, he nearly took us down to meet the laffer curve… above which we receive less income than we would if we could find and peg the tax rates at the damn thing.

Which is why government receipts with a top tax rate of 80% pre-Reagan were 20% of the GDP, and Govt. receipts at 35% post-Reagan were … 20% of the GDP. How much did we lose lowering those taxes?

But maybe you’re right, taxes are a zero sum game. So lets raise taxes to 500% of earnings for one year to pay off all the debt. People will keep working because taxes are a zero sum game, and we’ll get 5 times the GDP in one fell stoke, right?

Nobody would think “Why would I earn $50,000 to owe $250,000 in taxes” because that would ruin the zero sum game that you know taxes are… and it might stop Bush from being the one true cause of all suffering throughout time. Which we can’t possibly allow.

So lets pretend that no citizens anywhere are capable of simple math, people don’t think about taxes, and taxes affect nothing. Oh, and lets pretend like you’re a reasonable rational person who isn’t just looking to pin everything on Bush. And lets pretend I look like Brad Pitt too… that sadly might be the easiest one to pretend in this list.

gekkobear on April 7, 2010 at 12:14 PM

DFCtomm on April 7, 2010 at 12:20 AM

Right on – if you have a VAT repeal all other taxes. I would rather see a flat tax. But, anything is better then what we have now. I doubt the Dems would go for that plan, they just want more money. Will be interesting to see how Obama steps into this one, now and after November.

EliTheBean on April 7, 2010 at 12:40 PM

They’ll never get people to agree to this. Then again, I said the same thing about nationalized healthcare. Of course, many people think they are getting something for nothing with healthcare where a VAT hits everybody including those of lower incomes.

Blake on April 7, 2010 at 1:49 PM

So, when this is implemented and our manufacturing business is no more, will I be able to get my free Obama money like that lady in Michigan talked about? Or how about my free health care? Or my free house? I’ve kinda gotten tired of working so hard to pay for these things for other people…maybe I should just see this VAT as a sign that I need to get on the Obama gravy train as a caboose instead of an engine.

MississippiMom on April 7, 2010 at 5:24 PM

Late to the party. Sorry if I’m repeating, but…
Don’t tax bills have to start in the House? Aren’t we looking at Republicans possibly winning the House in November?
Are we assuming those Republicans will be so weak and stupid that they could be conned by the jug-eared fascist to vote for a VAT as deficit reduction, knowing full well that this is pure BS?
What am I missing?
Please advise.

Extrafishy on April 7, 2010 at 5:56 PM

shocked. surprised. wow.

Dr. ZhivBlago on April 7, 2010 at 6:26 PM

No VAT ever!

Khun Joe on April 7, 2010 at 8:49 PM

When’s the tax on methane go into effect?
I wanna see them try to keep my score.

Cybergeezer on April 6, 2010 at 10:14 PM

I ‘ll give ya a run for your money (so to speak) :-)

cableguy615 on April 7, 2010 at 9:31 PM

So lets pretend that no citizens anywhere are capable of simple math, people don’t think about taxes, and taxes affect nothing

If you want to fight with the CEO’s of every company under the Berkshire Hathaway umbrella, be my guest. But the case has been repeated from within corporate America time and again: companies don’t decide to grow and expand because of low taxes. Expansion occurs in response to consumer demand. If consumers demand more of a product or service, companies will increase supply to meet that demand. Companies do not expand simply because taxes are low.

Your supply-side argument that people work harder when taxes are nominally lower has been studied by many of the nation’s best behavioral economists and been repeatedly proven untrue. It would be nice if lower taxes increased productivity. We tried that experiment at a national level a few decades. The results never matched the prediction of the supply siders, and that’s why the smart money- Fortune 500 CEO’s, Alan Greenspan, and Wall Street- will generally disagree with you. But I respect your opinion and think your point was well expressed.

bayam on April 8, 2010 at 2:11 AM

The VAT in DC is as the VIG (or vigorish) is in Las Vegas.

Dhuka on April 8, 2010 at 3:22 AM

DRIP…DRIP…DRIP…

As the water slowly boils around the frog, America is slipping away under the waves of PROGRESSIVE ROACHES.

VAT will start at 1%, just like the income tax started at 1/2%. Government taxes never die, they just consume.

Perhaps we all need to drive around Detroit. This is how America will look when the marxist progressives get done destroying her.

Cleveland Steamer on April 8, 2010 at 5:39 AM

But the case has been repeated from within corporate America time and again: companies don’t decide to grow and expand because of low taxes. Expansion occurs in response to consumer demand. If consumers demand more of a product or service, companies will increase supply to meet that demand. Companies do not expand simply because taxes are low.

bayam on April 8, 2010 at 2:11 AM

I’ll grant the possibility that this may be an accurate statement.

However, the problem is the reverse – higher taxes do indeed discourage growth and expansion.

See the problem now?

psrch on April 8, 2010 at 10:06 AM

Step one, socialism. Step two, communism.

Johan Klaus on April 8, 2010 at 6:38 PM

Companies do not expand simply because taxes are low.

bayam on April 8, 2010 at 2:11 AM

B.S.; lower taxes means more money to spend. Apparenty, you have never run a business. You do not gain revenue by raising prices. Lower prices lead to more sales. Ask WalMart.

Johan Klaus on April 8, 2010 at 6:44 PM

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