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The Dreaded VAT
By Kate Burch
The VAT, or Value Added Tax is a national sales tax on goods and
services that is applied at each stage of production. It is
widely used in Europe and some other developed nations. Rates,
naturally, rise over time, despite politicians’ promises to the
contrary. VAT rates in Europe, according to accounting firm Ernst
and Young, average 21.6%, up from 19.4% in 2008. This is on top
of income taxes! Politicians on the left side of the aisle in our
Congress want to add the VAT here.
Of course liberals and statists love the VAT, primarily because it is a
hidden tax that can be manipulated willy-nilly by politicians rewarding
their cronies or punishing their enemies, all the while feeding the
beast. We see today the consequences of that other stealth
measure, automatic withholding, in that unsophisticated taxpayers have
no idea how much they are paying, and actually believe that they are
receiving a gift when they file and get a tax refund. These same
people will blindly and happily vote for ever-increasing spending and
taxes.
Proposed legislation for the FairTax (H25, S155) has been in existence
since 1995, and is slowly gaining ground, but is a tough sell because
it removes from politicians their favorite tool, the tax code, for
accumulating power and riches. The FairTax would involve repeal
of the 16th Amendment, abolishing the income tax. The Federal
Government would instead be funded by a national retail sales tax in
lieu of, not in addition to, the income tax. This tax would be
SIMPLE, as the rate (23% and designed to be revenue-neutral) would be
the same for all purchases. It would be TRANSPARENT, as the
amount of tax paid would be clearly indicated on the sales receipt for
all new goods and services (used goods would not be subject to the
tax.) It would be FAIR, because every consumer, including
tourists, illegal aliens, and those involved in criminal or
under-the-table dealing, would pay the same rate.
The FairTax is morally defensible, unlike the income tax, and it also
would set in motion an economic boom like none we have seen for many
years. It would also incite public pressure for greater economy
in government. I can hear the objections coming--I have heard
them all in my years of being a grassroots advocate for the
FairTax. But look it up; there has been a boat load of research
on this plan which can be easily accessed via the website:
www.fairtax.org., and that will convince reasonable people that
everyone would be better off under the FairTax. Our nation needs
it.
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