By Suzanne Eovaldi, staff writer
When my financial advisor gave me a lot of caveats about the new Fair Tax surfacing in Congress, what I really heard him saying was, “You can’t trust government.” The unintended consequences of the proposed Fair Tax are pause for alarm because “when they sell a Fair Tax, they don’t tell you about other taxes” that will conveniently remain on the books.
“In theory if the government says they’ll take away all other taxes, do they?”
The Fair Tax is a misnomer in Europe. The income tax was not abolished when they added a VAT value added tax or Fair Tax. The problem is, they are suffocating the average European citizen. A United Kingdom VAT of 17.5% on top of a 50% income tax totals a 67.5% fed to the amorphous blob; in France: VAT 19.6%, income tax 40%, total 59.6%; Greece: income tax 40%, VAT 25%, total tax 65%; Spain: VAT 16%, income tax 45%. In Sweden a 25% VAT plus a 55% income tax results in an eye popping 80% tax individuals feed to the government wow! Denmark’s 83% is even worse!
“The United States is heading right down the same path,” my advisor tells me. Initially our current administration looks to propose a minuscule amount of only 1% or 2%, just like Europe started out imposing. Our 14 trillion dollar debt load is not sustainable, but he stresses VAT economies are deeply mired in gargantuan debt loads as well.
The American notion of hard work and perseverance enables anyone to get ahead here. “Do you think that can ever happen with tax rates between 60% to 80%?” he asks. What would our lives be like with the European model of Obama’s redistribution of wealth?
Consider never being able to buy a home or a car or send your children to college without government controlled agendas and indoctrination. We’ll be riding bikes and living in small apartments with extended families. The senior financial executive, who is touting gold as the answer, is saying that monetizing our debt is no longer done by printing money, but rather just by moving computer generated “money” from Bernanke’s Federal Reserve into the columns of foreign and domestic banks. The resulting Texas two step allows the banks to buy our Treasury notes at a 3% gain which our children and grandchildren will have to pay back in 10 years! When and how do we stop this madness? My advisor reveals that the Yuan – dollar pressure this past week now could result in an IMF currency basket with worldwide drawing rights, thus pushing America down, China up.
Look, at my age, 75, a lot of this won’t matter unless the Obama death panels take me out sooner rather than later. But what do we leave our children, or our precious grandchildren? Put down your golf clubs, mah-jongg tiles, give up some early bird diners, pull up your elastic waistbands, and as Florida Governor Rick Scott says, “Let’s Get To Work.”
Use this link to contact your Congressional Representative:
SOURCES: If you want to talk to my financial person, email me using the comment feature below. Also see Money Magazine’s articles on inflation and Harry Schultz’s Last Testament by Peter Brimelow in Market Watch, Jan.20, 2011.
Lord Rees Hoog, former editor of The Times of London: “Governments lie, bankers lie, even auditors sometimes lie. Gold tells the truth.”
For an it would be so funny if it weren’t so true moment, go to http://www.thedailyshow.com/watch/tue-december–7-2010/the-big-bank-theory
This day in history January 23
1941: Faux hero Charles Lindbergh testifies before Congress and recommends the United States negotiate a neutrality pact with Hitler.
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