An article today titled ‘Once Considered Unthinkable, U.S. Sales Tax Gets Fresh Look Levy Viewed as Way to Reduce Deficits, Fund Health Reform’ says that “with budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax”.  I suggest you take the time to click on the link and read the full story.

Under a heading ‘Seeking New Revenue’ the article says “The surge of interest in a VAT is testament to the extraordinary depth of the nation’s money troubles”.  I would say so!  Herein lies the conceptual problem I see facing the U.S. and any other government, business or individual borrower who spends beyond its/their means.  If one does that and incurs debt it/they can’t service and repay in the end, absent the ability to print fiat currency – which of the three only a government has - the borrower has only two choices or a combination of two choices (or declare bankruptcy):  reduce spending, save and service debt and pay down debt principal with those savings, or find a way to increase income (revenue in government parlance).  So what is the U.S. to do?  Its politicians are unlikely to cut spending anytime soon, and where can the U.S. government increase revenue – surely not by taxing its citizens who are losing both jobs and personal wealth at unprecedented rates.  The U.S. politicians can debate a ‘value added’ or any other incremental tax they want to, but from my perspective I don’t see how that plays well with either its citizens or U.S. economic recovery.

Click here for Uranium Mining Stock Research.

See Blog Legal Disclaimer

Email this Post to a Friend.

Trackback URI | Comments RSS