Political Pistachio

Blog Home of the Writer and AM and FM Radio Host, Douglas V. Gibbs.
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Sunday, May 30, 2010

The Liberal Tax Man Cometh


By Douglas V. Gibbs

I find it odd that government demands more than God requests.

I tithe ten percent, but lose much more to a government that can't even balance its books.

If private citizens treated their finances like the government, they'd be filing for bankruptcy, and would be arrested for illegal activities.

Even more odd is the fact that Barack Obama campaigned on the notion that he was going to somehow cut the taxes of 95% of Americans, while soaking the other 5%. That seemed to be quite a goal, considering that over 40% of Americans don't pay taxes because they are exempt, or because of tax credits.

Of course Barack Obama was lying. Liberals do that. Spending is their game, and finding sneaky ways to get more taxes out of people while calling the highway robbery something else is their aim. Then, after everyone is soaked through fines, fees, and taxes with not-so-taxing names, the Leftists stand up and say, "See? We only taxed those mean old rich people who make more money than they should be allowed to."

In a conversation I recently had with a local liberal, he swore up and down that Obama had kept his pledge, and has cut taxes. I tried to explain to the person that tax credits are not tax cuts, they are simply a prize for performing an action (or not performing an action, depending). Keep your books with expenses labeled carefully? Get a prize. Have a boat-load of kids while poor? Get a prize. Allow your misery to drop below the government labeled poverty standard? Get a prize. Work as little as possible so that you may remain under the line of failure dictated by the government? Get a prize.

"Well," he said to me, "Obama hasn't imposed any new taxes."

"Actually," I responded, "Yes he has. And interestingly enough, the poor are the ones paying them."

The most glaring example of Obama breaking his campaign promise to not raise taxes on the poor is the largest increase in tobacco taxes in the history of this nation, which took place recently under his watch, and under his guiding hand. The tax increase took effect despite Obama's promise not to raise taxes of any kind on families earning under $250,000 or individuals under $200,000. And the most interesting part about the tobacco tax is that this is one tax that disproportionately affects the poor, who are more likely to smoke than the rich.

Ahhh, but don't you worry, the liberal tax man is not finished yet.

With the kind of unprecedented spending we are seeing coming out of Washington these days, it was only a matter of time before the liberal Democrats realized they were going to need to find another source of revenue to feed their freedom-sucking spending habit, and they were going to need to find it soon.

Tax hike proposals have been appearing regularly, primarily posing as punitive taxation for your bad behaviors, or at least bad behaviors according to the standards of a few folks that think the government should have a say over what you eat, drink, and do. They have proposed taxing sugary drinks, and salt, as well as increasing taxes on gasoline and alcohol.

And guess what? Those are not items only used by the top 5% wage earners.

Now, I know what the leftist spokes-holes have been saying. They claim Obama's position on taxes was that he would not raise income or payroll taxes on families making less than $250,000. How convenient, that leaves him open to screw the public with all kinds of other taxes that are not "technically" income or payroll taxes.

One of those options, which will be the largest tax increase in the history of this nation, is the coming Value Added Tax.

The VAT exists in failed dominance in Europe. It is a tax similar to a national retail sales tax, but is collected at every stage of business production until its entire burden ultimately falls on the consumer.

As always, the dopes of government believe their problem stems from not enough revenue. That is what they think in California. In the Golden State, as California spirals rapidly towards bankruptcy, the Democrats and progressive Republicans claim that Proposition 13, the law that caps property taxes, is the reason for the state's economic troubles. After all, having the fourth highest property taxes in the nation is a hindrance to their spending. They wish us to be the highest in the nation, then, maybe, they can afford their spending habit a little more.

The Value Added Tax is said to be a quick fix for the deficit because of the rapid injection of revenue, while the tax is also an allegedly difficult tax to evade. However, the thought process on that is in error, for evidence from other countries that use the VAT suggests that not only is fraud rampant with the tax, but that the companies paying the tax will simply transfer the payment to the consumers in higher prices, and decreased quality.

In the long run, consumer spending drops, production is reduced, and with the VAT in place the amount of revenue actually decreases.

That is the case with any tax increase. The more you tax an activity, the less you get of that activity. Tax increases, be they attempts to control our behavior as consumers, or attempts to increase revenue, they are always a sure way to decrease revenue as the spending increases.

As proven by Presidents Harding, Coolidge, and Reagan, the sure fast way to increase revenue is to cut taxes across the board (yes, that means cutting the taxes of the rich too!). Then, if you decrease spending too, while eliminating the bulk of government intrusion into the business sector (that means eliminating much of the regulation in place), the economy will be vibrant and prosperous.

In other words, the current policies of the current administration are leading us towards a financial collapse that will be devastating should we continue down this path. Only cutting taxes, decreasing spending, and pulling the government out of the business of the private sector will truly create economic growth, and lead us in the direction of economic recovery.

-- Political Pistachio Conservative News and Commentary

Value-Added Tax: No Easy Fix for the Deficit - Heritage Foundation

Out of Money? Value-Added Tax Next Up - Heritage Foundation

PROMISES, PROMISES: Obama tax pledge up in smoke - Breitbart, Associated Press

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