No Value in This Tax
Lurking in the shadows of the Obama administration is a value added tax to bail out the huge deficits we are burdened with because of Congress.
The VAT originated in France in 1994, and was quickly taken up by other European Union countries. France now gets almost 50 percent of its total tax revenues through the VAT.
Since the Obama administration wants us to follow a country like the United Kingdom, this tax replaced what was then called the indirect tax of 7 percent. The starting VAT in the UK was 8 percent on most consumer items but was quickly raised to 10 percent; today it is 17.5 percent. There are exceptions and exclusions; one such is utility bills, taxed at only 8 percent.
For a country to join the EU, it must have a VAT of between 15 percent but not more than 25 percent. Denmark started with a VAT of 9 percent; now it is 25 percent, and they’re asking the EU government to have the ability to raise it further.
To any politician, this tax is a cash cow. But as shown by looking at the EU, rates start out low but quickly grow to cover the politicians’ need to expand government services.
Everyone pays this tax for almost everything they buy. Some say it is regressive, as it taxes consumption, and that the poor pay more than the middle class. The offsetting view by politicians is that the tax is generally used to give more services to the poor. And this is no fair tax, since all of the EU and the other 130 countries that have a VAT also have an income tax.
Get ready, folks, I think it’s coming here.
Robert K. Wallace
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