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VAT or Value Added Tax, is a term you need to become familiar with and understand.  The VAT is a tax that is added to the price of goods or services before a consumer purchases them.  It takes the form of an indirect tax in that the cost is added at various stages throughout the manufacturing process, or is added to the cost of services before you receive the bill.

Suppose you are standing at the checkout stand at your local big box store to purchase an item that costs $100 today.  When the clerk tenders your sale and asks for your money they ask for $100, plus $10 for state and local taxes which brings your total bill to $110.

When the Value Added Tax is applied the same item that retails for $100 today will suddenly retail for $120.  When the clerk tenders your sale you will owe $120, plus $10 for state and local taxes which brings your total bill to $130.00.  You can clearly see the difference.  Instead of paying $10 in taxes, you are now paying $30 in taxes for the same $100 item (not to mention the other taxes that were already embedded in the price of the product at the time of this writing.)

Where did the VAT come from?  The short answer is: your Federal Government, though the idea is not new.  Presently, they are studying every ramification of this and have plans to implement it in the near future.  The VAT has been in use in Europe for many years.  For example, Germany collects an additional 19%, France and Italy collect an additional 20%, while most of Scandinavia collects an additional 25%.

Value Added Taxes are in place to add more revenue to governmental coffers to pay for programs as Universal Health Care and others.  America’s leadership has bought into the European Socialism model.  We have now become a socialist state much like the old Soviet Russia and most of modern Europe.  In addition, the Healthcare Bill also included the provision to tax your retirement monies an ADDITIONAL 3.8% over and above what you would have paid last month.

When will the VAT be applied?  It is coming sooner that many believed it would.  In fact, a 12% VAT is scheduled to begin on April 1, this Thursday, on toll fees on select toll roads across America.  It is just the beginning; more VATs will follow. Federal spending is totally out of control.  In addition, many cities, counties, and a few states (California, and Michigan,) are facing possible bankruptcy. 

Don’t like what you are reading?  It is even more disturbing to write.  With a $13-20 trillion federal deficit projected by the end of this decade now is the time to make changes to our spending habits.  Some answers:  1. Call your local, state, and federal elected officials and demand a spending freeze.  Or be even more radical and demand that all programs be cut by 10%.  2. Elect fiscally responsible people to serve at all levels of government…local, state, and federal levels.  3. Run for public office and bring about needed changes.  4. Suggest remedies of your own.