Value Added Tax Hidden in Health Reform

[newsmax]

Value Added Tax Hidden in Health Reform
Saturday, November 28, 2009 2:44 PM
By: Theodore Kettle

With spending at nearly 25 percent of GDP and headed for more than 40 percent of national output, according to the liberal Progressive Policy Institute, how will the Democrats pay for it all?

The evidence points toward the way big-government, slow-growth Europe does it: the value added tax.

Working as a sales tax that you don’t get to see on your receipt, the VAT has proven to be a brutally efficient money machine in other countries. Maybe that’s why Speaker of the House Nancy Pelosi last month told Charlie Rose that a VAT was “on the table” as a solution to America's fiscal liabilities.

But it’s not just “on the table.” It’s in the Senate’s health reform bill soon to be voted on.

The Senate bill’s “fee” on medical devices operates much like a VAT, and could end up being the model for future adoption of an unprecedented VAT on all goods and services in the United States.

Deep into the 2,074-page bill, on page 2,020, is “SEC. 9009,” the “Imposition of Annual Fee on Medical Device Manufacturers and Importers.” It orders that “Each covered entity engaged in the business of manufacturing or importing medical devices shall pay to the [Treasury] Secretary not later than the annual payment date of each calendar year beginning after 2009 a fee in an amount determined under subsection (b).”

The amount of tax would be based on “gross receipts from medical device sales.” Treasury bureaucrats would have the formidable power of “identification of medical devices” and the new tax would be retroactive, applying to “any medical device sales after December 31, 2008.”

Bruce Bartlett, deputy assistant secretary of the Treasury under former President George H.W. Bush, has called a VAT perhaps “the least bad way of financing needed tax reforms and the massive growth of federal health care spending that neither the [George W. Bush] White House nor Congress shows any interest in restraining.”

But in pushing for his tax reform program in 1985, President Ronald Reagan warned that “a value-added tax actually gives a government a chance to blindfold the people and grow in stature and size.”

For President Barack Obama and the Democratic Congress, a VAT may be just the blindfold needed for the Europeanization of the U.S. economy – massive government, high unemployment and a lower quality of life: a very new lifestyle for Americans.


http://www.newsmax.com/insidecover/vat_tax_healthcare_reform/2009/11/28/291701.html?s=al&promo_code=9236-1

[Guest]

call or write your representatives NOW.

[Guest]

Just be aware: Theodore Kettle works for Newsmax which is a right-wing news organization. Not exactly unbiased reporting.

[Guest]

Doesn't make what he says not true.

[cranb09]

very distorted view of healthcare being proposed by Dems .. remember death panels

[Guest]

Why is this a distorted view?

[publius]

[Washington Examiner]

Damn the deficit: Full speed ahead on health care
By: Michael Barone
Senior Political Analyst
November 25, 2009

Double-digit. That hyphenated adjective has been used most often recently to describe October's 10.2 percent unemployment rate. But it can also be used to describe the federal budget deficit as a percentage of the gross domestic product. That precise number is not yet known, but it may turn out to have a more dire effect on our national life than October's unemployment rate.

In the fiscal year just ended, federal spending was nearly 25 percent of GDP while federal revenues slipped below 15 percent because of the financial crisis and recession. We have not seen a budget deficit of this magnitude since World War II, which surely was a greater challenge than recent economic troubles.

Apologists for the Obama administration argue that some 2009 spending, like that on financial bailouts, is nonrecurring. True, but as the Congressional Budget Office has reported, the trajectory of administration spending and revenue is pushing the annual deficit toward $1,000,000,000,000 -- that's $1 trillion -- for the next decade.

Congressional Democrats' health care bills threaten to add to that. The bill currently before the Senate is advertised as costing less than $1 trillion. But significant spending doesn't kick in till 2014 and over the ensuing 10 years adds up to $1.8 trillion, nearly double that.

Thanks to current low interest rates, servicing the debt costs the government only $200 billion this year. But the White House estimates that debt service will exceed $700 billion in 2019. "In a few years," the Economist editorializes, "the AAA rating of Treasury bonds, the world's most important security, could be in jeopardy."

It's not only Republicans who decry this prospect. Examining the Democrats' health care proposals, William Galston, domestic policy adviser in the Clinton White House, writes, "We're already facing an unsustainable fiscal future."

Looking further ahead, Scott Winship notes in the Progressive Policy Institute's progressivefix.com blog that federal spending is on course to exceed 40 percent of GDP because of scheduled spending on entitlements -- Social Security, Medicare, Medicaid -- within the lifetime of today's children.

Yet the congressional Democrats who are pressing to expand federal health care spending do not seem much fazed by the prospect that, as Winship writes, "the level of taxation it would require to meet projected spending needs is far higher than anything the country has ever seen-slash-tolerated."

That suggests that, at least for some Democrats, huge looming budget deficits are not a bug but a feature.Just as Ronald Reagan hoped that cutting taxes would force politicians to cut spending, these Democrats hope that increasing spending will force politicians to increase taxes to levels common in Western Europe. Never mind that those economies have proved more sluggish and less creative than ours over the long haul.

The instrument they may have in mind is the value added tax, which operates as an invisible sales tax on goods and services. Back in May, Budget Director Peter Orszag's spokesman mentioned the VAT as a "credible idea" that he did not want to rule out. In June, House Ways and Means Chairman Charles Rangel suggested a VAT as "a point of discussion."

In September, John Podesta, head of the Obama transition team, spoke of how a VAT would "create a balance" with other economies, and White House adviser Paul Volcker cited a carbon tax and a VAT as ways to raise lots of revenue. In October, Speaker Nancy Pelosi said, "Somewhere along the way, a value added tax plays into this."

These statements are noteworthy, because American politicians are ordinarily skittish about saying we should imitate Europe's high-tax and high-spending policies. These policies seem more unpopular than ever 10 months into the Obama presidency. Pollster Scott Rasmussen reports that 53 percent of voters worry that the federal government will do too much in response to economic problems, while only 37 percent worry it will do too little.

That mirrors voters' current opposition to Democratic health care bills. Democratic leaders nonetheless want to jam one through before their current majorities are eroded, as they seem likely to be, in the 2010 elections. This is politically risky, but makes sense if your goal is to expand government.

So the battle over health care is not just about health care. It's about whether government will permanently gobble up more of the private-sector economy and slow it down in the process.

http://www.washingtonexaminer.com/politics/Damn-the-deficit_-Full-speed-ahead-on-health-care-8583120-73022217.html

[Guest]

[Guest]

All do respect folks, there are plenty of issues that will have a greater impact on our community than this. This is a local forum. Currently, our elected officials in Trenton are facing a meltdown, the result of which will directly effect Cranbury. This is an issue we should be following closely.

[Guest]

I went to the Washington Examiner site, since I had never heard of this august publication, I looked at the other articles. There is an article on "Death Panels". Please Newsmax and now this consider the source.

[Guest]

I love how Dems are so blinded that they won't even consider any source that may be outside their mainstream as valid. Here are some articles on VAT and Obama. Anyone who reads the business section or main section of a major paper knows this is in discussion. In fact I would prefer no income tax and straight VAT.


Washington Post
Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

"There is a growing awareness of the need for fundamental tax reform," Sen. Kent Conrad (D-N.D.) said in an interview. "I think a VAT and a high-end income tax have got to be on the table."

http://www.washingtonpost.com/wp-dyn/content/article/2009/05/26/AR2009052602909.html

Pelosi's comments
A new value-added tax (VAT) is "on the table" to help the U.S. address its fiscal liabilities, House Speaker Nancy Pelosi (D-Calif.) said Monday night.

Pelosi, appearing on PBS's "The Charlie Rose Show" asserted that "it's fair to look at" the VAT as part of an overhaul of the nation's tax code.

"I would say, Put everything on the table and subject it to the scrutiny that it deserves," Pelosi told Rose when asked if the VAT has any appeal to her.

The VAT is a tax on manufacturers at each stage of production on the amount of value an additional producer adds to a product.

Pelosi argued that the VAT would level the playing field between U.S. and foreign manufacturers, the latter of which do not have pension and healthcare costs included in the price of their goods because their governments provide those services, financed by similar taxes. THIS IS WRONG!! THEY DO HAVE PRIVATE PENSIONS AND MEDICAL.

"They get a tax off of that and they use that money to pay the healthcare for their own workers," Pelosi said, using the example of auto manufacturers. "So their cars coming into our country don't have a healthcare component cost. THIS IS WRONG IN MOST COUNTRIES. GERMAN IS THE ONLY ONE SHE IS RIGHT ON.

http://thehill.com/blogs/blog-briefing-room/news/61783-pelosi-says-new-tax-is-on-the-table


NY TIMES

Congress is wrestling with how to pay for Mr. Obama’s vision to extend health care to all Americans, and some lawmakers are considering tax increases and spending cuts different from the ones he has proposed. House Democrats, for example, are weighing a tax on soft drinks and a value-added tax, a broad-based consumption tax similar to the sales taxes many states levy.

http://www.nytimes.com/2009/06/16/health/policy/16obama.html

[cranb09]

death panels, Obama a racist, blah blah blah blah

[Guest]

[publius]

UM..................A VAT is nothing more than a sales tax.
Thank You.

[Guest]