Four tax burdens with an Obama victory in November

October 5, 2012

 

First published at Illinois Review on September 4, 2012

If Obama is re-elected on November 6, it won’t matter if the Republicans keep the House and/or take the Senate or vice versa, because Obama has proven to us time and again that he will simply do as he pleases. If Congress won’t pass what he wants, President Obama will issue an Executive Order – whether it’s Constitutional or legal or not – and force the action on us anyway. No one has stopped him so far. No one will stop him in the future.

With certainty, whoever wins in November will have the leverage to dictate the terms of the Bush Tax rates which are scheduled to expire on January 1, 2013.

There is good reason to believe that the Bush Tax rates would be extended under a Romney presidency, but should Obama be re-elected, he and the Democrats will allow the Bush Tax rates to lapse.  Your tax bill will go only in one direction, UP!  Also, if you die after January 1, 2013, your estate over $3,000,000 will be taxed at 55%, instead of 0% currently in place.

The election of President Obama would also definitely grant the taxes that are coming with  the Obamacare health plana continued lease on life. Within the this plan are about 20 new taxes that will be added to your already high tax load.  Many of these taxes are already in place and others are ready to roll on January 1, 2014, the date engineered by Democrats to prevent back lash from voters before the upcoming November election.

The Alternate Minimum Tax (AMT), which has never been indexed to inflation, will no longer hit the ‘rich’, as was its original intent. It will now hit approximately 28,000,000 tax-paying, average American citizens.And, rolling down the tracks to join the above taxes are two other taxes should Obama be re-elected to a second term: The VAT (tax) and the Guaranteed Retirement Account (GRA).

How else can Obama deal with the staggering debt of $16 trillion plus, of which he has created over $6 trillion in his first term, unless new taxes are imposed upon the American people? After all, taxes are the meat and potatoes of the Democratic Party. Enough is never enough to keep constituencies happy and to retain power.

From Wikipedia comes this explanation of the VAT (Value Added Tax):

“A value added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture or distribution. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid on the inputs.

The value added to a product by a business is the sale price charged to its customer, minus the cost of materials and other taxable inputs. A VAT is like a sales tax in that ultimately only the end consumer is taxed. It differs from the sales tax in that, with the latter, the tax is collected and remitted to the government only once, at the point of purchase by the end consumer. With the VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products.” en.wikipedia.org/wiki/Value_added_tax

In 2010 the idea of a VAT (tax) was up for consideration by Congress.  Paul Volcker, who was at the time, President Obama’s debt and deficit commissioner, and other big-government advocates, said a VAT should be considered to fund major spending obligations.

According to an article written by John Northdurft and published on July 15, 2010, a Chamber of Commerce study indicates that Government spending grew 45 percent faster in VAT nations than in those without one. Northdurft was questioned as to whether imposing new taxes to pay down the deficit and fund unsustainable entitlement programs is irresponsible.  He responded, “Without real, extensive entitlement and spending reforms, the United States will not be competitive in the global economy and our national debt will continue to balloon.” http://heartland.org/policy-documents/research-commentary-vat-will-increase-both-debt-and-taxes

A VAT usually begins at a fairly low level and then soars once it has been put in place to feed a government’s insatiable craving for money.  A recent article in the Chicago Tribune (9/15/12) tells of a large increase in Iceland’s current VAT:

“Iceland:  The government is considering an astronomical tax hike on services used mostly by tourists, including hotel accommodations, restaurant meals and attractions.  If approved, the increase in VAT (value-added tax) to 25.5 percent from 7 percent would take effect May 1.  An outcry is expected from the tourism industry, especially tour operators who have booked trips for next year and cannot absorb the additional cost.” www.chicagotribune.com/travel/ct-trav-0916-world-watch

Many European countries have a VAT (tax). It often runs between 15% and 20%. The VAT is often the main tax of a country; they usually do not also have an additional income tax or property tax. Once a VAT is in place, it’s almost never removed.

Should Obama be re-elected, past behavior predicts that he will apologize to the American people, telling them there is no other way to tackle the massive debt (still blaming Bush!) other than to adopt the VAT (tax). Obama will further implore the American people to trust him because it must be done, after which the American people will be obliged to pay another tax in addition to the ones they already pay.

As with the VAT (tax), the Guaranteed Retirement Account (GRA) issue is still lurking in the background waiting to be put into effect. This tax idea recently was raised in 2008 as one way to stem losses by workers and retirees who were losing money from their 401Ks and IRA accounts due to unemployment and the bad economy.

The program involves mandatory participation in a government-run savings plan to which each citizen would contribute five percent of his salary. The plan would be administered by the Social Security Administration, but would be separate and in addition to the citizens’ current social security accounts. In turn, a refundable tax credit of $600 would go to each participant, regardless of his contributions. The account would have a guaranteed interest rate equal to the government’s official inflation rate plus three percent.

Further suggested at the time to/by Congress were that tax breaks for 401Ks and IRAs and pensions be eliminated and these funds be put under the GRA to be run by Social Security. The result: By giving up your earned pensions and savings and investments to the Federal Government, in return it would guarantee – oh, absolutely promise! – you would be paid a specific amount when you retired – for the rest of your life.  Just like Social Security!

Given a national debt of $16 trillion staring legislators in the face, with no serious effort to stop or reduce it on either side of the aisle, there is little doubt that Democrats in a second Obama term would look at what Europe is doing,

With GRA, the government would take away your last vestige of personal control. It doesn’t matter that government did nothing to earn it or grow it. They want it. They need it. They’ll throw it away and give it away. They’ve put this country into trillions of dollars of debt and they are desperate to find money anywhere, not only to pay the bills, but to continue spending.

How could legislators be expected to resist the lure of trillions of dollars of private savings just sitting out there being used by private citizens? They’ll want to ‘redistribute’ those funds to all those who ‘need’ it and never worked for it – because it’s fair, don’t you see?

And, don’t think the Republicans won’t fall prey to the same lure. We’re out of money. Somebody has to find it somewhere, and these savings would be easy pickings. Just nationalize everyone’s accounts and give them a receipt with a promise to pay it back – with interest.

Why not beat your Senators, your Congressmen and the White House to the punch. Call them and warn them you are aware of this movement and don’t want it happening.

If you fail to let your elected federal legislators and the White House know you are watching them, they will quietly go about their business and will keep you in the dark until it’s too late. Always keep in mind what will happen if Obama is re-elected and has four more years of uncontrolled power with no accountability to any one.

In November you have one chance to vote Obama and others who think like him out of office. Don’t blow it!

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