The new tyranny

I voted for hope. What I’m getting is a new kind of tyranny, the tyranny of fiscal irresponsibility, burdensome taxation and claustrophobic government bureaucracy.

This recession started at the household level. Millions of us made bets on illusory home appreciation data, aided and abetted by grow-at-any-cost bankers. Mine is one of those households, and I am personally and professionally humbled.

I can deal with my own mistakes and bad judgment. What bothers me is that there is one household that hasn’t gotten the message.

Despite the recession, this household refuses to cut spending to match its income. This family, already heavily in debt, wants to buy a ton more stuff with money it doesn’t have.

And the head of this household expects you and me to make up the difference, claiming that all of us will benefit from his brilliant investments – in failed car companies, imploding banks and universal medical care – all cover stories for payoffs to labor unionists, corrupt financiers and Big Pharma.

When I hear President Obama talk about adding a national sales tax to plug the gap between what the IRS already collects from me and what he wants to spend, I have to say no. He needs to cut back, like I have.

Instead, he’s talking about adding a new tax, a value added tax, or VAT, also known as a national sales tax. He argues that we need a new source of revenue to pay for all this great stuff, because the current tax system isn’t bringing in enough. And one of the rationales used to support this argument is that because it’s used in 130 countries, the VAT is the most popular tax on the planet. Is any tax popular with anyone other than a government official?

Leonard Burman of the Tax Policy Center said “everybody who understands our long-term budget problems understands we’re going to need a new source of revenue, and a VAT is an obvious candidate.”

Isn’t an obvious candidate for solving our budget problems to cut spending? According to the US Treasury, Obama already borrows 46 cents for every dollar he spends. Now he wants to spend a ton more, with new spending set to exceed income by $1.3 trillion next year alone.

That’s where you and I come in, along with our grandchildren who will be paying interest on today’s loans for decades. Obama’s bankers in China are nervous about lending him more, so he has to come up with cash somewhere else. Ergo the VAT.

Yet the VAT presents an irony. Here we are in a recession and a national sales tax would actually slow the consumption that drives economic growth. Look at the math. If you have a $100 budget and face an 8.5 percent state sales tax plus a 10 percent national VAT tax, all of a sudden you can only buy $80 worth of stuff. Maybe you can borrow the twenty bucks from your kids.

I had hoped to see a shift from the tyranny of the Bush years to an era of rational, smart decision-making. Now I’m just seeing the dark curtain of a new tyranny sweep across our amber waves of grain, the tyranny of taxation and nationalization, a thick wet blanket of bankrupt ideas that will stifle and not stimulate, that will crush and not nurture, that will give us the illusion of ho pe by stealing it from our grandchildren.

Mark Nassutti is a writer living in Kirkland.