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Financial Planning > Tax Planning

Our march through Europe

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I hesitated with the title, considering ‘toward’ rather than ‘through,’ but went with the latter because I believe we’re already there. Consider: an exponential leap in public sector growth with a corresponding decrease in private sector production, government control of the nation’s health care delivery system, and energy subsidies that encourage ‘alternatives’ while discouraging traditional fossil fuel consumption. Add high youth unemployment to the mix, and voila, the fait is accompli.

The latest is the so-called Value Added Tax (VAT), something columnist Charles Krauthammer has predicted for some time and to which Paul Volker gave credence Tuesday. We can at least credit Europe for their creativity and innovation–even if said innovation is in tax policy. Acting as a brilliantly disguised sales tax, the VAT extracts its tribute at each stage of production, increasing a particular item’s cost until it ultimately reaches the consumer at the end of the line. So much for tax increases on the wealthy; this one’s aimed straight at the middle class. Just don’t expect the administration or Congress to inform you of this until well after the November elections.

We can debate all day about whether or not we should adopt these policies from “an older, more mature European culture.” But as I wrote last week, only the most dissonant ideologue would argue we’re not already there.


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