Obama promised an across the board tax cut for all middle class Americans.  He swore up and down that the low-level tax payer would see relief.  Now that he’s in office, however, with an astronomical deficit and a trillion dollar health care project in the pipeline, it’s becoming apparent that he’s changed his mind.  More and more, it looks like every American, regardless of their income, is staring down the barrel of a 10% tax increase.

How’s he doing it?  Well, he’s assigned former fed chairman Paul Vocker to head up a task force aimed at rethinking the tax code.  Vocker has shown tentative support for a 10% sales tax on everything you buy.  It’s called a VAT, or Value-added Tax, and it’s common in other countries, particularly those with mild to mid-level socialist governments.   Here in the States, Vocker is not the only VAT proponent.

A bigger Vat-fan is chairman of the Senate Budget Committee Kent Conrad (D – ND), who said recently  “There is a growing awareness of the need for fundamental tax reform.  I think a VAT and a high-end income tax have got to be on the table.”  

Kenneth Baer, spokesman for White House Budget Director Peter Orszag, said he believes the VAT is “unlikely to be in the mix.”  Of course, Orszag then turned around and hired one of the nation’s most prominent VAT supporters to advise him on health care - none other than White House chief of staff Rahm Emanuel’s brother, Ezekiel Emanuel.

For his part, Treasury secretary Timothy Geithner has remained quiet on the subject.  It’s a surprising silence, since this may be the one tax Geithner would have trouble dodging.

At the center of it all is Barack Obama – a man who’s given new meaning to the phrase “tax and spend.”  He has promised Health Care reform in a way that no president has before.  Many pundits say his administration will be a failure if he doesn’t get it.  The government is already borrowing 46 cents of every dollar it spends, mostly from China, and he’s acknowledged that he can’t pay for his new medical system solely with tax increases on the wealthy.  He’s surrounded himself with advisors who believe a VAT is the best way to dig us out of the massive hole he’s created.  Gee, I wonder what will happen… 

Amazingly, the hardest hit victims of a VAT will be the very people Obama swore to protect: the poor.  Is it possible that Obama’s decided to go after them next?  Maybe the administration thinks it’s finally squeezed all the blood from the big stones, and it’s time to start rounding up the little ones.  Whatever the case may be, one thing is for sure: If Obama wants to squash productivity, kill manufacturing jobs, decimate small business, and increase the burden on those living below the poverty line, he’s found the perfect way.

-Robert Laurie