The VAT Cometh

National Review ^ | March 26, 2010 | Charles Krauthammer

[C19fan]

As the night follows the day, the VAT cometh.

With the passage of Obamacare, which created a vast new middle-class entitlement, a national sales tax of the kind almost universal in Europe is inevitable.

We are now $8 trillion in debt. The Congressional Budget Office projects that another $12 trillion will be added over the next decade. Obamacare, when stripped of its budgetary gimmicks — the unfunded $200 billion­–plus doctor fix, the double-counting of Medicare cuts, the ten-six sleight-of-hand (counting ten years of revenue and only six years of outflows) — is, at minimum, a $2 trillion new entitlement.

[C19fan]

I think Mr. Krauthammer misses one point. The reason Socialists love the VAT over say traditional sales tax is most of the VAT tax is hidden to the final consumer. The VAT is applied to the value added in each stage of production. So for example, you buy a pair of shoes for $50. The retail store you buy it at says its costs are $45 and the VAT rate is 10% so the tax on your recepit is 10%*($50 - $45) = 50 cents. So people see their recepit and it is not a big deal. But this 10% has been applied to each stage of production and distribution as the shoe went from some pieces of leather to your feet. So without a VAT the costs of the shoe would be say $5 you the true costs of the VAT to the consumer is $5.50, but only 50 cents is visible.

[C19fan]

Should read: So without a VAT the costs of the shoe would be say $5$45, the true costs of the VAT to the consumer is $5.50, but only 50 cents is visible.

[Red6]

Wait,

I thought the health care bill will fix our deficit by saving $.99 on fraud, and $.99 in waste, and another $.99 by streamlining things. lol

The VAT is a horrible idea, but it will be appealing to those that now will soon be faced with the reality that somehow everything (i.e. government cheese) has to get paid for.

[ryan71]

Bet on it!

They have until November to implement as many socialist policies as possible.

[Waco]

I have read that the average poverty level person here is above most Europeans. Is this what’s in store for us.

[C19fan]

Moderator: Feel free to delete since this was posted earlier. I search VAT but the earlier article used Vat in the title so I missed it.

[Paine in the Neck]

Not just a VAT but Cap & Trade, Amnesty, 401K seizure and anything else they can get through before November.

[EternalVigilance]

Krauthammer does a grave disservice when he conflates the terms “VAT” and “National Sales Tax.”

The former is insidiously hidden, the latter is the most visible tax possible.

There is a major difference.

[riri]

Krauthammer needs to come to Europe and shop like the little people. Then he can first hand see the effects of a VAT tax. I just paid $11 for a cheap plastic pencil box and a small bottle of hand sanitizer.

[shanover]

It is a race to November.It is scary to see how much damage can be done by then.

[crosshairs]

They have until November to implement as many socialist policies as possible.

Better stop putting your faith in November elections taking place, comrade.

[jjsheridan5]

“Krauthammer needs to come to Europe and shop like the little people. Then he can first hand see the effects of a VAT tax. I just paid $11 for a cheap plastic pencil box and a small bottle of hand sanitizer.”

I don’t think he’s advocating VAT. He is warning us.

A VAT tax would be as profound, and devastating, a change to this country as nationalized health care. November cannot arrive soon enough.

[Inspectorette]

I saw Dr. Krauthammer talking about this. He definitely is NOT advocating a VAT. He is, as you say, warning us that this is the next part of the plan from hell.

[riri]

I don’t think he’s advocating VAT. He is warning us.

I know, he just wasn't sounding the alarm bells loud enough for me on just how devastating it would be... like you did. (:

Quite honestly, these aren't people operating like they ever plan to lose power. These are communist revolutionaries at the helm.

[MikeGranby]

> The VAT is applied to the value added in each stage
> of production. So for example, you buy a pair of shoes
> for $50. The retail store you buy it at says its costs
> are $45 and the VAT rate is 10% so the tax on your
> recepit is 10%*($50 - $45) = 50 cents.

That’s not right! VAT is collected at the full rate on sales, but refunded at that rate on purchases. The consumer pays the entire amount ($5 in your example) but this gets passed back down the supply chain and paid to the government by each link in proportion to their value add.

[A.A. Cunningham]

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