In my prior post, I wrote about the massive debt the Obama administration will add to this country’s already massive debt if it gets all the tax breaks and reforms it wants. I also wrote about the administration’s apparent don’t-worry-be-happy attitude to the scary budget numbers we posted.

Clearly, President Obama is a smart guy. And he has surrounded himself with smart people – I know some of them. They know they can’t afford their proposals. At least, not yet.

So, here’s my “black helicopter” theory.

For a while, until we clear this recession, the administration can’t do much on the tax side of things other than talk. That’s why President Obama established a tax reform panel – which should be called the Big Stall Commission. (I mean, my goodness, there aren’t even any real tax policy experts on this thing). That buys time.

And on the talk side of things, we’re going to hear about those bad rich people who are just too wealthy for their own good. And all those beastly corporations whose plummeting values have hurt everyone’s 401Ks. And especially those evil CEOs whose sole reason for being is to line their pockets, those scum. (News flash: CEO is not a synonym for crook. Full disclosure: I’m a CEO.) But this populist pablum goes over well in these trying times. Meanwhile, the President will assure us that people in the middle class will be getting an income tax cut. And we will hear that the income tax system needs to be more progressive. Progressive means those with more, pay higher rates. (A principle, by the way, I strongly believe in.) Here’s the problem. You can demonize corporations and CEOs all you want, but it won’t get you much. That kind of hatred will take years off your life and taxing the crap out of the rich and those corporate-types won’t get the administration all the money it needs for its programs.

The administration knows this. So what’s it going to do? Well, sooner than you think the President will address the nation and say, “Holy Smokes! We’re broke! We need to do something quick!”

And that is when we’ll all start talking about the VAT.

What’s a VAT? It stands for value added tax. The VAT is like a sales tax, but different. It’s common in Europe – a place loaded with people President Obama wants to really, really like him. Some call the VAT the most economically efficient tax in the world – which means it’s a money machine. Unlike the sales tax, the VAT is applied incrementally at each step of the production cycle. That means it applies to wholesale, or business to business transactions. So, it’s easier to hide. It lets you cut income taxes for middle class taxpayers, while still raising taxes on just about everything else. The VAT is regressive, which means it hurts the little guy more than the fat-cat CEO. It would also dump tons of money into the government’s coffers.

Viola! Money problem solved. And then we change our name to France. Hey, it’s not all
bad; maybe then the terrorists will start leaving us alone.