A Vat of Stupid

As the right wallows in decay, another prescient column from Charles Krauthammer digs through the entrails of modern-day conservatism to divine our dark future as a nation. This time, the smoking gun appears not in the form of a mushroom cloud but as the equally dire cumulonimbus of the value-added tax, threatening to strike with a torrent of unspeakable—nay, positively European—terrors.

The facts are as clear as the sky in this case. We are now $8 trillion in debt—pay no attention to the causes of that debt—and the nonpartisan Congressional Budget Office claims that it will increase by $12 trillion over the next decade. That same CBO apparently can't be trusted, however, when it claims that Obamacare will reduce the deficit by $140 billion over that timespan. Why, when stripped of its budgetary gimmicks—the unrelated annual waiver of Medicare fee caps for physicians, the fact that Medicare cuts are somehow applied to both debt and deficits (calculus be damned), the dastardly sleight-of-hand that sees revenues rise in tune with outflows—Obamacare apparently resembles a giant unaffordable two-trillion-dollar pink elephant named Bruce.

It will vastly increase the debt^{[[citation needed]]}, and even when it doesn't, it doesn't matter. Why? Because, in crafting the Affordable Care Act, Obama and the Democratic Congress committed the unpardonable sin of using the "best and easiest means" of funding, meaning that the money can no longer be spent on higher priorities like upper-income tax cuts and pyrotechnical foreign aid to Iran. It simultaneously expands spending for Medicaid by increasing coverage (bad) and reduces spending for Medicare without affecting coverage (also bad). Why, Moody's is even threatening to reduce its ratings for Treasury bonds, thanks to the fallout from an economic catastrophe triggered in part by Moody's incompetence in rating other securities. The only result can be a run on the dollar and/or hyperinflation like that last seen in Zimbabwe and Argentina—countries that, not coincidentally, shared with America the dubious distinction of issuing largely U.S. dollar-denominated debt.

And here is where the VAT makes an appearance. It has the virtue of expediency: ever since the passage of the 16th amendment, people have been used to paying sales taxes to the federal government, and a 1% value-added tax on all goods and services would yield up to an astonishing 0.6% of GDP in tax revenue. Now our grim future is in sight: thanks to a $100 million annual expenditure, we cannot help but end up like the poor citizens of Scandinavia, impoverished and imprisoned by their socialist-jihadi overlords imposing a 25% VAT (and with their lower statutory corporate tax rates to boot!).

One wonders, though, if Br'er Krauthammer doesn't protest a little too much about the prospect of a national sales tax—something be even more regressive than the flat income tax of Steve Forbes' wet dreams. After losing in his months-long fight to tar Obamacare with every aspersion in his vocabulary, fed-up Chuck might have found his briar patch. Hence he squeals at the "splendid" prospect of drinking from the VAT trough, since taxing consumption (whether conspicuous or compulsory) makes infinitely more sense than taxing work, to say nothing of the ridiculous prospect of taxing unearned income at anything close to the rate of taxing work.

It's becoming clearer and clearer that Obama seeks to overturn Reagan's strategy of gavaging the beast with unlimited debt in pursuit of new entitlements for the military-industrial welfare state. The VAT may be the only way to satisfy those greedy animals who have the audacity to get sick on taxpayers' dime. Yet as the population ages, we will undoubtedly come to regret this boost in insurance coverage that applies strictly to those under 65. One can only imagine the horrors that will occur once our elderly are threatened by the inevitable fiscal ruin and health-care rationing that comes with the government's getting its intrusive little hands on our Medicare. Until then, get ready for the VAT. Or pink elephants.