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Republicans Oppose Value Added Tax
Written by on May 20, 2010, 09:15 PM
I sent a letter to the co-chairs of Barack Obama’s debt commission today, co-signed by 154 Republicans, urging them to focus on reduced spending instead of new taxes like the Value Added Tax common in European countries. White House Economic Advisor Paul Volcker has called for a VAT and President Obama has refused to rule it out. New taxes would be a huge mistake. Just like overfishing can put fishermen out of business, high taxes ultimately lead to weaker economies and less government revenue. Our only viable option is to reduce spending. Here’s what the Intelligencer-Journal/Lancaster New Era is reporting about the letter.
Pitts, GOP lawmakers: spike idea of consumption tax
By TOM MURSE, Staff Writer
U.S. Rep. Joe Pitts is leading a GOP effort to pressure President Barack Obama's debt commission into spiking the idea of a nationwide consumption tax as a way to close the budget deficit.
"With unemployment at nearly 10 percent, Americans cannot afford the burden of a new job-killing tax," Pitts wrote in a letter to the National Commission on Fiscal Responsibility and Reform on Thursday.
The letter was signed by 153 other congressional Republicans, including House GOP Conference leaders including Leader John Boehner, Whip Eric Cantor and Chairman Mike Pence.
White House spokesmen have said repeatedly that the president has not proposed and is not considering such a tax, commonly referred to as a value-added tax. But Obama hasn't completely rejected the idea, either, saying in interviews that the tax is "something that has worked for some countries."
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.
Suggestions of imposing a VAT in the United States have grown in the face of a looming $1.6 trillion budget deficit in the current fiscal year that began Oct. 1. Obama's debt commission began meeting in April and is expected to producing a plan to reduce the deficit.
Republicans lawmakers, however, are suggesting the commission focus on spending cuts, not new taxes.
"A new value-added tax is no way to revitalize an American economy that needs to create millions of new jobs," Pitts said in a statement. "European VAT taxes have not prevented these countries from going into deep debt, they have only slowed job growth."
The lawmakers, who did not identify potential budget cuts in their letter, said a value-added tax of 19 percent did not save Greece from its debt crisis.
"The result of increased government spending and taxation in Greece has been a consistently high unemployment rate of nearly 10 percent and a bankrupt government," the lawmakers wrote in their letter.
Asked where he would cut spending, Pitts said he would freeze discretionary spending and propose a one or two percent across the board cut in spending.
Pitts called, additionally, for a repeal of the new healthcare law and replacing it with cheaper alternatives, as well as saving and strengthening entitlement programs such as Medicare and Social Security.
"Long term, entitlements are the biggest problem," said Pitts. "We have $107 trillion in binding entitlement promises Congress has no plan to pay for. Whatever we do, we should not be creating new entitlements we can't afford."
(This report contains information from our wire services.)
http://articles.lancasteronline.com/local/4/256394
Pitts, GOP lawmakers: spike idea of consumption tax
By TOM MURSE, Staff Writer
U.S. Rep. Joe Pitts is leading a GOP effort to pressure President Barack Obama's debt commission into spiking the idea of a nationwide consumption tax as a way to close the budget deficit.
"With unemployment at nearly 10 percent, Americans cannot afford the burden of a new job-killing tax," Pitts wrote in a letter to the National Commission on Fiscal Responsibility and Reform on Thursday.
The letter was signed by 153 other congressional Republicans, including House GOP Conference leaders including Leader John Boehner, Whip Eric Cantor and Chairman Mike Pence.
White House spokesmen have said repeatedly that the president has not proposed and is not considering such a tax, commonly referred to as a value-added tax. But Obama hasn't completely rejected the idea, either, saying in interviews that the tax is "something that has worked for some countries."
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.
Suggestions of imposing a VAT in the United States have grown in the face of a looming $1.6 trillion budget deficit in the current fiscal year that began Oct. 1. Obama's debt commission began meeting in April and is expected to producing a plan to reduce the deficit.
Republicans lawmakers, however, are suggesting the commission focus on spending cuts, not new taxes.
"A new value-added tax is no way to revitalize an American economy that needs to create millions of new jobs," Pitts said in a statement. "European VAT taxes have not prevented these countries from going into deep debt, they have only slowed job growth."
The lawmakers, who did not identify potential budget cuts in their letter, said a value-added tax of 19 percent did not save Greece from its debt crisis.
"The result of increased government spending and taxation in Greece has been a consistently high unemployment rate of nearly 10 percent and a bankrupt government," the lawmakers wrote in their letter.
Asked where he would cut spending, Pitts said he would freeze discretionary spending and propose a one or two percent across the board cut in spending.
Pitts called, additionally, for a repeal of the new healthcare law and replacing it with cheaper alternatives, as well as saving and strengthening entitlement programs such as Medicare and Social Security.
"Long term, entitlements are the biggest problem," said Pitts. "We have $107 trillion in binding entitlement promises Congress has no plan to pay for. Whatever we do, we should not be creating new entitlements we can't afford."
(This report contains information from our wire services.)
http://articles.lancasteronline.com/local/4/256394
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