Hatch Statement On Value Added Tax To Fund Government Expansion
U.S. Senator Orrin Hatch (R-Utah), a senior member of the Senate Finance Committee that has jurisdiction over tax policy, issued the following statement today after senior Obama Administration advisor Paul Volcker announced yesterday that a Value Added Tax (VAT) should be considered for deficit reduction:
"Burdened by crippling debt and unsustainable government spending, our economy remains fragile with nearly 10 percent of the American people unemployed. Instead of moving forward with a reasonable plan to get our economy moving again, the Administration and its allies appear set on moving forward with even more job-killing tax hikes on top of those in their $2.5 trillion health spending and cap and trade bills. There doesn't appear to be an end in sight to the massive tax hikes coming out of Washington these days. I guess we shouldn't be surprised. After all, European levels of spending require European levels of taxation - leading to the miserably low economic growth rates that Europe suffers.
"There's no question that we need to confront our skyrocketing debt that will reach an astonishing 90 percent of our nation's gross domestic product by 2020, and I believe we can do so in a reasonable and bipartisan manner. But when we should be liberating the private sector and small businesses in particular to get our economy moving again through lower taxes, the Administration is taking exactly the opposite approach. A VAT is another in a long string of bad ideas that, if allowed to prevail, will bankrupt our country and cheat our children and grandchildren of the future they deserve.
"If the American people decide that they want to pay higher taxes, which I certainly do not believe is the case, a value added tax is exactly the wrong way to do it. The reason is that a VAT is largely a hidden tax, and its effect is not easy for the ultimate taxpayer -- the consumer of goods -- to see. Thus, it is easy for elected officials to ratchet up the rate and by the time Americans learn of the damage this insidious tax does to the economy, it may be too late.
"Furthermore, the recently enacted health-care spending bill, riddled with gimmicks to hide its true cost, will only make our fiscal picture worse. That's on top of a deeply-flawed, trillion-dollar so-called stimulus spending bill that was supposed to be temporary, but whose spending Democrats are trying to make permanent."