U.S. Rep. Charlie Dent (PA-15) today stated his opposition to any effort to impose a value-added tax (VAT) – a tax that would raise the cost of virtually all economic activity in America and crush any economic recovery. A VAT is levied at each stage of production, on the value that is added by each firm that contributes to the good or service.
Due to the unsustainable level of spending that has led to record deficits, some Administration officials have floated the idea of introducing a VAT. Congressman Dent signed on to a resolution offered by Rep. Todd Tiahrt, which would express Congress’ belief that a VAT would be harmful to America’s economy.
“One of my major concerns with the recent Health Care bill is that it puts America on the path of becoming a European-style welfare state, and a value-added tax would be a dangerous next step,” Congressman Dent said. “A value-added tax disproportionately and unfairly targets low and middle-income workers, and would be devastating to Americans on fixed income. By raising the cost on almost everything that is made, purchased or consumed in America, a VAT would further move our country toward a government-centered economy rather than one fueled by American innovation.”
The resolution noted that the VAT has been widely adopted by European nations and is routinely cited as encouraging public spending at the cost of private job creation. For example, Denmark enacted a 9 percent VAT in 1962, but today Denmark's VAT has surged to 25 percent.
“If we are to enjoy a sustainable recovery, we must entrust more economic power with the American people and less with Washington bureaucrats,” Congressman Dent said.