Obama Considering a Value Added Tax

During the presidential campaign, Barack Obama said this, “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”

Now, President Obama says that “everything has to be on the table” as his newly appointed debt commission goes to work, but he would not entertain questions about whether tax increases, included a value-added tax, or spending cuts will get serious consideration.

One of Obama’s closest economic advisors, Paul Volcker, who was also the former Chairman of the Federal Reserve, said last week, a “VAT should be on the table.” He also said a VAT was “not a toxic idea.”

Volcker isn’t the only notable source floating the idea. According to the USA Today, Congressional Budget Office director Doug Elmendorf said a VAT is being studied:

“as part of its ‘strategic planning’ for the future — one in which the $1.5 trillion budget deficit and $12.5 trillion debt must be addressed by policy makers. ‘Many people in Congress are interested in it,’ Elmendorf said, without specifying who.”

The Value-Added Tax, or VAT, is a consumption tax imposed on all levels of production. Many European countries impose a VAT, which taxes the value that is added at each stage of production of certain commodities. It could apply, for instance, to raw products delivered to a mill, the mill’s production work and so on up the line to the retailer.

The Wall Street Journal explains the Value-Added Tax this way:

“A VAT is essentially a national sales tax that is assessed at each stage of production, with the bill passed along to consumers at the cash register. In Europe the average rate is a little under 20%. In the U.S., a federal VAT would presumably be levied on top of state and local sales taxes that range as high as 10%. Some nations also exempt food, medicine and certain other goods from the tax.”

With the passage of the multi-billion dollar health care bill, in addition to already high spending levels, Democrats are drowning our nation in debt. The VAT tax lures Democrat support because with a 10% VAT, a potential for one trillion in revenues could be raised. Small business owners cannot grow if every product they need has been taxed every step of the way.

When asked if he could see a potential VAT in this nation, the president said: “I know that there’s been a lot of talk around town lately about the value-added tax. That is something that has worked for some countries. It’s something that would be novel for the United States. ”

After his campaign pledge, it should be pointed out that everyone would be subjected to paying the VAT regardless of their income. This is a lot like George Bush’s “Read my lips: no new taxes” with a progressive twist.

Arizona’s Immigration Enforcement Law

Arizona’s new Immigration Enforcement Law is certainly stirring debate. It’s creating a lot of noise and inflammatory rhetoric from both sides that can only be characterized as racist and nothing more than fear-mongering.

With the support of 70 percent of its citizens, Arizona has ordered sheriffs and police to secure the border and remove illegal aliens, half a million of whom now reside there. Arizona acted because the U.S. government has abdicated its constitutional duty to protect the states from invasion and refuses to enforce America’s immigration laws.

“‘We in Arizona have been more than patient waiting for Washington to act,” said Gov. Jan Brewer. “But decades of inaction and misguided policy have created an unacceptable situation.”

“We have a crisis in Arizona because we have a failed state in Washington. What is the response of Barack Obama, who took an oath to see to it that federal laws are faithfully executed? He is siding with the law-breakers. He is pandering to the ethnic lobbies. He is not berating a Mexican regime that aids and abets this invasion of the country of which he is commander in chief. Instead, he attacks the government of Arizona for trying to fill a gaping hole in law enforcement left by his own dereliction of duty. He has denounced Arizona as “misguided.” He has called on the Justice Department to ensure that Arizona’s sheriffs and police do not violate anyone’s civil rights. But he has said nothing about the rights of the people of Arizona who must deal with the costs of having hundreds of thousands of lawbreakers in their midst.”

President Obama criticized the recently passed Arizona immigration bill, calling it “poorly conceived.”

“You can imagine if you are an Hispanic American in Arizona, your great grandparents may have been there before Arizona was even a state, but now suddenly if you don’t have your papers, and you took your kid out to get ice cream, you’re gonna be harassed,” Obama said. “That’s something that could potentially happen. That’s not the right way to go.”

To be fair, Obama made clear that illegal immigrants bear responsibility too. “We are a nation of immigrants,” he said, “but we are also a nation of laws.”

“The truth is that 11 or 12 million folks, we’re gonna have to make them take responsibility for what they did,” Obama said. “And the way to do that is to make them register, make them pay a fine, make them learn English, make them take responsibility for the fact that they broke the law.”

Attorney General Eric Holder and Homeland Security Secretary Janet Napolitano were both critical of Arizona’s new law on immigration and Holder said the federal government may challenge it.

Napolitano said the new state law could siphon federal money and staff from hunting down dangerous immigrants.

The critical comments by the nation’s top law enforcement official and the Cabinet secretary responsible for preventing terrorist attacks on U.S. soil came four days after Arizona’s governor signed a law designed to crack down on illegal aliens.

Arizona’s new law is subject to potential abuse, Holder told a news conference. The law — which takes effect this summer – allows police to question anyone about their immigration status if they have reason to suspect they are in the country illegally, and makes it a state crime if they are.

The Justice Department and the Homeland Security Department are reviewing the state law.

Let’s establish what Arizona’s law does and does not do. It does not empower police to stop random people on the street and demand their papers, Gestapo-style, as many on the left have claimed. The law quite simply requires police to check immigration status with reasonable suspicion only after they have made “lawful contact.” In other words, the police have to have good reason to stop someone for some other reason before even getting to the immigration check. This power is not unprecedented. In fact, police in all 50 states already check immigration status in this way every time they ask for a driver’s license, since in most states, illegals cannot obtain one. Furthermore, the law specifically prohibits racial profiling as a tool. So the worries about discrimination seem themselves to be an emotional overreaction.

Federal law already requires all resident aliens—i.e. green card holders—to carry their identification papers on them at all times. Arizona, then, has done no more with this law than the federal government itself.

Because the US Congress and both the Bush and Obama administration has refused to deal with America’s illegal immigration problem, it is likely that more and more states will follow Arizona’s lead and take matters into their own hands.

Already, a Republican lawmaker in Texas plans to introduce a tough immigration measure similar to the new Arizona law. Rep. Debbie Riddle of Tomball said she will push for the law in the January legislative session, according to Wednesday’s editions of the San Antonio Express-News and the Houston Chronicle.

There’s already been much debate about the new Arizona immigration enforcement law and it will continue to be argued from both sides throughout the summer. But to truly understand what it means, you have to read it for yourself. Then you can at least have an informed opinion on the issue rather than arguing the talking points of others. You can see the entire bill here.

You will notice that it mentions “reasonable suspicion,” meaning those groups who complain about random searches are ill-informed or lying in yet another attempt to divide this nation over race for political reasons. You will also notice that the authorities may not “solely consider race, color or national origin” when verifying the status of suspected illegal immigrants.

Puerto Rico Democracy Act – Their Road to Statehood

According to Majority Leader Steny Hoyer (D-MD), the House of Representatives will vote on H.R. 2499, the Puerto Rico Democracy Act, later this week. Congressman Jason Chaffetz (R-UT) stated today that the vote will actually take place tomorrow.

Statehood has traditionally been granted only to territories whose residents show, in referendum or otherwise, overwhelming support for statehood. There is no such support in Puerto Rico. Occasional votes have been held asking island residents if they wanted statehood instead of their special status, but voters rejected change each time. The statehood option garnered just 46.3 percent and 46.5 percent of the vote in the last two attempts, the most recent in 1998.

Past elections have shown that commonwealth status is favored directly over statehood, directly against independence and directly against some sort of hybrid arrangement. Yet among all four options, commonwealth support appears to enjoy only a strong plurality, but maybe not an absolute majority. The Democrats’ scheme is to first hold a vote with just two options: commonwealth on one side, anything else on the other. If supporters of all three other options ban together, they might vote to rule out the commonwealth without knowing what would replace it.

Only if and when that first vote succeeds would a second vote be held to determine which of the other three options would apply – with commonwealth status off the table.

To stack the deck even more, the House bill would explicitly allow people to vote in this election who were born in Puerto Rico but no longer live there. Nothing appears to bar somebody from voting on statehood while being a registered voter of, say, New York or Florida or even the District of Columbia. There are 2.5 million people who were born in Puerto Rico that now live in the Continental United States that under this bill would be allowed to vote on what should happen to Puerto Rico.

Because Puerto Rico leans heavily Democratic, congressional Democrats pine after the two new senators and perhaps six new House members who would be added to their caucus if statehood passed.

It’s true that if Congress passes this referendum bill, it is not obliged to grant statehood if Puerto Ricans approve it by a narrow margin. But passing the bill would be taken in Puerto Rico as an implied promise that Congress will grant statehood if it comes out ahead in a referendum. Congress shouldn’t make promises, even implied promises, it won’t keep, and especially promises to our fellow U.S. citizens in Puerto Rico. It certainly shouldn’t do so just to produce a few more votes for one party in the U.S. Senate, House and Electoral College.

To be sure, if Congress passes this bill and the Puerto Rican (and former Puerto Rican) voters choose the statehood option, Congress still would control the ultimate decision to make the island a state.

H.R. 2499, which is being pushed by the New Progressive Party in Puerto Rico trying to create a U.S. sanctioned vote that they say is nonbinding but would give them the legitimacy to implement what is called the Tennessee Plan and then come back and try to seat people in the United States Congress. It’s part of their party platform.

But the thought is that if Puerto Rico sends a full delegation claiming official status and the legitimacy of a popular vote, regardless how slim the margin of victory, a Democrat-majority Congress would seat the delegation in an instant.

Presto! Sew a new star on the flag.

Because H.R. 2499 is non-binding and would only authorize a vote, the Congressional Budget Office (CBO) did not score the bill. The cost to taxpayers would be high. The Lexington Institute has estimated, for example, that it will cost the U.S. $26 billion per year if Puerto Rico is added as a state.

Contact your representative and express your concerns about HR2499 and ask if he or she has read the bill (as we have found, bills are often voted for or against without being read!). You can click here to find out if your representative is a sponsor and to read the bill yourself.