Webster's defines "Value added tax" as: "A tax on the estimated market value added to a product or material at each stage of its manufacture or distribution, ultimately passed on to the consumer."
Obama's senior economic adviser, Paul Volcker, is recommending that the administration inflict on the American people a European style Value Added Tax (VAT).
This is a tax that politicians love because by law it is hidden from the person that must pay it, the consumer, just like the hidden taxes on every gallon of gasoline.
Another reason politicians love it because they can raise the tax rate at anytime and the consumer will never know it because it is against the law to show the amount of the VAT on the consumer's purchase receipts.
The tax starts with each individual piece of material needed to build the item, then the builder adds another tax for the item itself, then the final seller tops it off with yet another tax.
While we were in Washington, DC, we had a meeting with our favorite Senator (Evan Bayh) and asked him to explained the VAT Tax, and we thought we would share this with you our readers.
Let us try to explain to you how it is designed to steal your money without you knowing it:
The VAT taxes the value added to each step in the development of every product.
As an example he gave, suppose GM is building a car and the VAT rate is 20%, which is less than the European rate. Assume they buy all the parts from parts suppliers, who in turn buy only materials. If the part suppliers buy $5,000 worth of raw materials, they will pay $6,000. The raw materials company will send $1,000 (VAT) to the government. The suppliers then sell the parts to GM for $15,000. GM will pay $18,000 for the parts ($3,000 VAT), but the suppliers will send the government only $2,000 plus proof of the $1,000 already paid. GM then sells the car to a GM dealer for $25,000 plus $5,000 VAT. It sends the government $2,000 plus proof of $3,000 already paid. The GM dealer sells the car to a consumer for $30,000 plus $6,000 VAT. The GM dealer sends the government $1,000 plus proof of the $5,000 paid. The consumer pays $36,000 for the car.
Talk about a scam on consumers!
There's more:
It also means taxes on all services, doctor bills, plumbing bills and services rendered. If there already state taxes charged on products and services it will be collected in addition to the state sales tax that still will be collected.
And guess what?
Every single person in the United States that has to eat, drink, have a roof over their head, drives a car, or has to buy any item, for any use, will be paying this tax through the nose.
Obama has finally found a way to even tax the homeless, since even they must eat at some point in their day.
"And if it is enacted, you can bet the farm that even if we get a Republican majority, it is not going away!"
At this point in his administration, the majority of the people in this country are beginning to realize they have elected a "Madman" to steer the Ship of State.
What they are realizing after 16 months of being his passenger, is that Obama's motto is: Drive it like you stole it!"
So, how's that "hope and change" working for you?
