Kansas Republican: VAT Tax Would Cripple U.S. Recovery

Probably the only thing we need to know about the VAT is that it is generally disliked in countries that have it. In this country--what with federal income taxes, state income taxes, sales taxes, property taxes--implementing a VAT would a bit much. In states with no state income taxes, the VAT could be more easily absorbed, but those states are few in number.

So, any talk about the VAT really ought to begin with what each person's total tax liability is before the VAT and what it would be after. That way, we all start knowing what our personal tax burden will look like.

What, though, about PayGo? Pay for all undertakings up front, not disguised in overall federal liabilities, ever increasing and never ending? My first candidate for PayGo is our total expenditure as a nation on the combination of national defense, homeland security, nation building, and foreign aid designed to gain the cooperation of other countries. Contrary to popular belief, very close to 60% of federal expenditures annually end up in that hopper, much of it disguised in categories other than "Defense." As a debtor nation of some notoriety nowadays, we can't afford that. With PayGo, we'd not want to, and all talk of a VAT would soon dissipate like yesterday's weather.

Some would say, no, it's entitlements spending that's causing our ever deeper indebtedness. True, it accounts for a lot, but given a rewards system in the U.S. that rewards only achievement, not just hard work at whatever level, social safety net programs like Medicare, Social Security, etc. are necessary. Look to the Middle Ages and Victorian England for two spectacular examples of what happens when cheap labor is prized and no safety net exists. Once you get into the ugly that was then, you'll not want it on your watch, lest the gates of Heaven close on you. PayGo before such entitlements were voted into effect or into expansion would no doubt have been a factor in limiting them. But, so too, PayGo would've had a remarkable influence on changing the nature of rewards in the private sector. Just think about that.

Any talk about a VAT, in other words, needs to occur with everything else presently the case in the United States considered. Instituting PayGo the minute the next fiscal year's budget is being thought about could have a wondrously clarifying effect in the minds of those now careless in how they think about "necessary" and "unnecessary." It is my guess that once we see how almost 60% of our annual budget is being deployed, we'll repent of past sins--like thinking the projection of American power around the world produces benefits in excess of expenditures.

Ron W. Smith of UT 6:19PM June 01, 2010