The threat of a Value Added Tax is part of a “cultural battle”

That title comes from a recent Wall Street Journal op ed by Pete DuPont:

“A cultural battle is under way in America, a battle between, in columnist Michael Barone’s, words, ‘the culture of dependence and the culture of independence.’

The culture of dependence is the belief by American liberalism that government can make better decisions for people than people can make for themselves.”

Instead of doing the sensible thing and rolling back spending, the Democrats controlling the federal government are now talking about imposing a Value Added Tax. Pete DuPont defines it this way:

“The VAT is an invisible excise tax added to each phase of a product’s production, really a national sales tax, with the cost of the total VAT ultimately paid by the final purchaser, regardless of his income or wealth. A VAT would likely contain some exemptions–for food, clothing, medicine and housing costs–but it would impose taxes on most other daily purchases, gasoline, televisions, automobiles, computers, airfares, cell phones, refrigerators, newspapers and restaurant foods, for example.”

In DuPont’s words, the VAT “would be a crushing cost addition to the Obama tax increases and on the cost of purchases by non-tax paying lower income people.”

Others are saying the same thing. The Heritage Foundation noted this:

[R]esearch by Heritage experts and countless economists reveals that a VAT would actually invite greater spending and economic turmoil, especially as it would be levied in addition to all other taxes.”

So, it’ll add a crushing cost AND invite greater spending and economic turmoil. If the Obama years aren’t yet causing enough hope for change, a VAT might just do the trick.

Matt Welch writes in the New York Post that Europeans are turning away from the VAT:

“With the stunning emergence of the consumption-based Value Added Tax (VAT) as a legitimate public policy option, the Obama administration has now all but made it official: There is no European economic idea too extreme for 21st century America. Even if the Europeans themselves are largely headed in the opposite direction.”

Welch also says, “If America was in Europe, we’d be Greece.”

Here are two more good, short posts on the topic from Pete DuPont’s Center for Policy Analysis:

The Value-Added Tax isn’t an easy fix for budget woes

Will they take “No” as answer to VAT?

©2010 John Francis Biver