Volcker Confirms Tea Party Movement’s Concerns On Value Added Tax

By Janet Peterson on April 10, 2010, 8:13 am Posted in Economy News

Paul Volcker, the elderly but intelligent former Federal Reserve Chairman has spoken about the Value Added Tax (VAT) being a good tool to raise money. The Tea Party movement has been suspicious of a VAT being imposed on the American people for some time. Their fears are now justified.

Paul Volcker knows economics well. He broke the back of the Carter inflation, when the prime interest rate reached above 21% many years ago. President Obama has again pushed him into the background and it cannot be certain if he is speaking for himself or the administration. Timothy Geithner, the Turbotax Treasury secretary is the “go to” guy right now.

VAT Raises Money

Europe has a VAT. Taxes are added at every stage of production. From factory to retail establishment, the taxes are added up. If one stage does not pay taxes, the other levels that added value to the product, will pay taxes. In this way the government always will get some taxes.

In reality, a VAT is good. Only when purchases are made is the person taxed. Low income people usually get some sort of rebate. What makes it negative is that other taxes are never lowered. If a VAT is substituted for other taxes, there might be some benefit. However, this tax is an additional tax. The promises to lower other taxes are false.

 

The Government Needs Money

Between the decreasing tax revenue coming into the Treasury coffers and the Healthcare and other high priced programs, there is simply not enough money. The VAT is going to appear. People will support it, if they can be convinced that other taxes will be lowered. People are gullible. It is either a VAT tax or the government will go even deeper into debt and become like Greece is today.

Related posts:

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3. National Tea Party Movement Have Liberal Dems Doing A Thelma & Louise
4. Unemployment And Economy: What The Tax Breaks Will And Won’t Do
5. COBRA Subsidy Extension 2010: Debt Consolidation Will Be Needed