If government-run healthcare is approved, it is very likely that politicians will then look for a new revenue source to finance all the new spending that inevitably will follow. Unfortunately, that means a value-added tax (VAT) will be high on the list. Indeed, the VAT recently has been favorably mentioned by powerful political figures and key Obama allies such as the Co-Chairman of his transition team and the Speaker of the House.
The VAT would be great news for the political insiders and belteway elite. A brand new source of revenue would mean more money for them to spend and a new set of loopholes to swap for campaign cash and lobbying fees. But as I explain in this new video from the Center for Freedom and Prosperity, the evidence from Europe unambiguously suggests that a VAT will dramatically increase the burden of government. That’s good for Washington, but bad for America.
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It’s worth noting that even if the politicians are unsuccessful in their campaign to take over the health care system, there will be a VAT fight at some point in the next few years. This will be a Armageddon moment for proponents of limited government. Defeating a VAT is not a sufficient condition for controlling the size of government, but it surely is a necessarry condition.
Some of you may wonder whether a VAT is acceptable as a total replacement for the current income tax. In another video, comparing the flat tax and national sales tax, I explain that a low-rate, consumption-base system would be great. But I don’t want that kind of tax in addition to the current internal revenue code. And that is exactly what Obama, Reid, Pelosi, et al, have in mind.
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