FRONT PAGE CONTRIBUTOR
Is there Bipartisan Support in the House for Obama’s VAT?
As income taxes creep towards their highest rates in decades, five Republicans are reportedly cosponsoring a bill to make you may pay more tax in the checkout line, as well.
The Hill is reporting that Rep. Bill Pascrall (D-NJ) has found five Republicans to go along with his proposal to impose a “Value-Added Tax” on products imported from countries that also have a VAT — a list which currently includes Mexico, India, and the entire European Union, along with many others.
The Hill reporter Walter Alarkon couldn’t be bothered to include a bill number or name in his piece (raising the question of what – if anything – he actually knows about this legislation), so I’ve done the leg work for him. The bill in question is HR 2927, or the “Border Tax Equity Act of 2009.”
§4491 of the bill, titled “Imposition of Tax,” states:
`(a) General Rule- There is hereby imposed a tax on imports of goods and services from any foreign country that employs an indirect tax system and grants rebates of indirect taxes paid on goods or services exported from that country.
`(b) Amount of Tax- The amount of the tax imposed by subsection (a) on an imported good or service shall be an amount equal to the excess of–
`(1) the indirect taxes that are rebated or not paid on the good or service upon its export, over
`(2) any indirect taxes imposed on the good or service at the border of the United States.
Rep. Walter Jones (R-NC), one of the bill’s GOP co-sponsors, has called on people to “let experts to analyze various tax reform plans before judging them” — including the VAT, which President Barack Obama (D-IL) and one of his chief economic advisers, Paul Volcker, have spoken favorably of as a way to decrease the administration and Democrat Congress’s record deficits.
Just two weeks ago, 85 Senators voted in favor of a Sense of the Senate resolution opposing the VAT, which called it “a massive tax increase that will cripple families on fixed income and only further push back America’s economic recovery.”
Read the legislation for yourself. Is this a VAT, or is it “simply” a tariff? To me, even if it’s the latter, if that cost is passed along to the end consumer here, then it’s the equivalent of a VAT. Either way, it sure sounds like a case of protectionism.