Tag Archives: Fiscal Policy

Mr. President, Here’s that Balanced Approach You Keep Demanding

Tax revenues will be 18.2 percent of GDP, slightly higher than their historical average of 18.0 percent of economic output. So we can safely conclude that revenues in general (and “unaffordable tax cuts” in particular) are not responsible for higher levels of red ink. Continue reading

Posted in America's Freedoms, Budget Issues, Cloward and Piven Strategy, Congress, Constitutional Responsibilities, Corruption, Deficit, Economic Security, Economic Terrorism, Energy and Oil, Freedom Justice and Liberty, Government, Government Regulations, Healthcare, Jobs, Liberals Big Spending and Taxes, Manufactured Crisis, Media Corruption, National Debt, National Security, New Media News, Politically Intentioned Crisis, Politics, Progressives pushing for Marxism/Socialism, Propaganda, Radical Liberal Progressive Left, Reject Socialism, Scandals, Smaller Government, Socialist Scare Tactics, TEA Taxed Enough Already, The Economy, Unemployment | Tagged , , , , , , , , , , , , , , , , , | 1 Comment

The Value-Added Tax Must Be Stopped-Unless We Want America to Become Greece

Many Washington insiders are claiming that America needs a value-added tax (VAT) to get rid of red ink. …And President Obama says that a VAT is “something that has worked for other countries.” Every single one of these assertions is demonstrably false. …One of the many problems with a VAT is that it is a hidden levy. …VATs are imposed at each stage of the production process and thus get embedded in the price of goods. And because the VAT is hidden from consumers, politicians find they are an easy source of new revenue – which is one reason why the average VAT rate in Europe is now more than 20 percent! …Western European nations first began imposing VATs about 40 years ago, and the result has been bigger government, permanent deficits and more debt. According to the Economist Intelligence Unit, public debt is equal to 74 percent of GDP in Western Europe, compared to 64 percent of GDP in the United States (and the gap was much bigger before the Bush-Obama spending spree doubled America’s debt burden). The most important comparison is not debt, but rather the burden of government spending. …you don’t cure an alcoholic by giving him keys to a liquor store, you don’t promote fiscal responsibility by giving government a new source of revenue. …To be sure, we would have a better tax system if proponents got rid of the income tax and replaced it with a VAT. But that’s not what’s being discussed. At best, some proponents claim we could reduce other taxes in exchange for a VAT. Once again, though, the evidence from Europe shows this is a naive hope. The tax burden on personal and corporate income is much higher today than it was in the pre-VAT era. …When President Obama said the VAT is “something that has worked for other countries,” he should have specified that the tax is good for the politicians of those nations, but not for the people. The political elite got more money that they use to buy votes, and they got a new tax code, enabling them to auction off loopholes to special interest groups.

You can see some amusing – but also painfully accurate – cartoons about the VAT by clicking here, andhere.

For further information on why the VAT is a horrible proposal, including lots of specific numbers and comparisons between the United States and Western Europe, here’s a video from the Center for Freedom and Prosperity. Continue reading

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Our Tax Dollars Are Funding Bureaucrats Who Advise Congress that Higher Taxes Increase Prosperity

But magnitudes matter. For all intents and purposes, CRS and CBO want us to believe that more government borrowing will have a very significant impact on interest rates and that those higher interest rates will have a very negative impact on investment. Yet neither bureaucracy offers any evidence for these linkages, in large part because the academic research shows that the relationships between deficits, interest rates, and investment are weak. Continue reading

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