I’m not a political strategist, but as I said in a recent comment I am an interested amateur. And with that caveat I can tell you that I see a big problem off on the horizon and it’s going to require immediate action to prevent it - if it can be prevented at all.
Let me start with my conclusion first. In my mind, the Tea Party Movement has to adopt a transparent broad based tax policy immediately, and use it as a litmus test for support among Republican congressional candidates, or what’s left of our liberty will finally be going over the waterfall. Let me explain…
Between now and the 2010 election, a gaggle of left and right wing think tanks will release study after study describing the kind of tax rates we’d need in our current system to address the deficit. These studies will be more designed to scare Americans than to educate them. There will be lots of apocalyptic language, and the rates described will all be 75% and above. The right will think it reflects badly on the left… the left will think it reflects badly on the current tax system. Both may be right.
Immediately after the 2010 election President Obama’s ‘deficit committee’ (staffed with political hacks like union boss Andy Stern) will come back with a recommendation for a VAT. The rate described for it will be tiny, especially compared to those recent studies. And it will be compared endlessly to those studies in the network media while they carry their typical amount of water for Team Obama. They’ll present it as a better way to “increase” taxes than with our current system, and will minimize the fact that it’s actually a way for Obama to break his campaign promise to raise taxes on EVERYONE. Democrats will draft legislation and with the help of people like Scott Brown and Olympia Snowe, will ram it though quickly in the hope that people will forget it all before the 2012 elections. This will be an unprecedented tragedy for America.
Without their own broad based tax plan, the Republicans will be in the uncomfortable position of arguing FOR larger deficits, and the network news media will roast them over an open fire for it. They’ll stammer and squirm like John McCain talking about home ownership rates or trade deficits, and the Democrats will get the REAL prize of the Obama administration… a totally obfuscated, highly effective tax that they can use to virtually every single economic winner and loser based on their political popularity. The ’free market’ will become political in a way that we’ve never experienced here.
But if the Republicans have already established a flat income tax or a completely transparent national sales tax as a part of the party platform, then they have a positive alternative to the Democrat’s positions. They’ll have a way they can be against deficits and still oppose the Democrats. The problem here though is that the insiders of the Republican party will probably also support a VAT. They’ll think it’s a better way to go for the same reason the Democrats do. A VAT is a great tool for increasing the power of the central government, and when the Republicans retake the helm they will be inheritors of all that power even if it’s Democrats that give it to them.
That’s why it has to come from an outsider group with the power to make a transparent broad based tax a part of the party platform. The Tea Party has to embrace it immediately, and begin pushing hard for it. It doesn’t matter which kind of tax really… at least it doesn’t’ to me. The key is that it must be transparent. It has to be a tax that everyone knows they’re paying, every single time they pay it. It can’t be something that it hidden and worked into the end product price (or not ... based on the state of the political give backs) and that no one knows they’re paying like with a VAT. It has to be something that is both clear and simple, because that will make it harder to change later, and much harder to give every interest group a special favor of a VAT give back.
One way or the other we are getting a broad based tax because the numbers don’t work out any other way. But I can’t possible overstate this…the pernicious thing about a VAT is how easy it is to hide. No one ever knows they’re paying it, and when they do, they don’t know how much it is. And it’s that obfuscation that will allow the congress to ‘direct’ or ‘target’ or ‘focus’ the tax on whoever they don’t like, and provide relief to whoever they do. That’s the real threat to America here.
So like I said… I’m no political strategist, but as someone who cherishes what’s left of his own liberty, the last thing I want to see is a tool in the hands of congress that gives them even MORE power to decide the winners and losers than they have now. The VAT will be just that. And to stop it, the Republicans had better have something to propose in it’s place. I don’t care what… but we had all better decide quickly because time is running out fast.
%%%%UPDATE%%%%%
Jonah Goldberg provides some supporting information for my view from Irwin Stelzer.
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