Bill Text: GA SR1507 | 2009-2010 | Regular Session | Introduced

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Bill Title: U.S. Congress; urging not to enact a value added tax

Spectrum: Partisan Bill (Republican 6-0)

Status: (Introduced - Dead) 2010-04-21 - Senate Read and Referred [SR1507 Detail]

Download: Georgia-2009-SR1507-Introduced.html

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10 LC 28 5261

Senate Resolution 1507

By: Senators Hill of the 32nd, Shafer of the 48th, Butterworth of the 50th, Chapman of the 3rd, Seabaugh of the 28th and others

A RESOLUTION

Urging the United States Congress not to enact a value added tax; and for other purposes.

WHEREAS, the value added tax or VAT was created by a French economist in 1956 and is now widely used throughout Europe and in India, Mexico, Australia, and New Zealand; and

WHEREAS, the VAT has been used for decades to pay the bills and sustain the immense growth of governments to provide services and entitlements they otherwise could not afford and constitutes the most voracious machine for revenue generation yet invented and, consequently, is beloved by the governments which utilize it; and

WHEREAS, generally, the VAT is a sales tax on the transfer of goods and services that ultimately is borne by the consumer except that it is charged at each stage in the development of a product instead of at the moment when the product is finally sold; and

WHEREAS, under the most common form of the VAT, the credit-invoice method, businesses pay the tax on their purchases and collect it on their sales and then, after deducting the taxes they paid on purchases from the amounts they collected on sales, businesses remit the difference to the government; and

WHEREAS, in operation, the VAT increases the cost of just about everything, from bread and cheese to a visit to the hair salon, with the hidden detriment that, while the consumer pays the tax, the actual cash is mostly collected from producers before it reaches the retailer; and

WHEREAS, the VAT is essentially a hidden charge embedded in the price of goods and services which, therefore, allows the government to raise the VAT without causing nearly the uproar that would result from increasing income and other taxes that are paid more directly by the individual; and

WHEREAS, as a result, the VAT can be easily increased by the government in order to pay for increased spending which offers a potential drag on economic growth and encourages bigger government budgets; and

WHEREAS, supporters of big government like the VAT precisely because it is so ubiquitous and because it is typically layered on top of existing taxes, rather than being substituted for them; and

WHEREAS, middle class taxpayers would be hit harder by a VAT because they spend more of their income on goods like clothing and cars than high-income earners do; and

WHEREAS, European governments have typically seen VAT hikes as an easy way to raise revenues during a recession and the result of such tax has been lackluster economic growth and a dearth of dynamism and entrepreneurship, the contrary of what the United States has always embraced; and

WHEREAS, the VAT will not even start to cover the explosion that we have seen in federal spending and it could lead to perverse incentives in the labor market since the introduction of a significant VAT on top of the current tax system would cause many people to decide that housework and the underground economy are more lucrative than working in the normal marketplace; and

WHEREAS, despite the perception that VAT's are difficult to evade, data show that fraud to avoid the VAT is widespread in the European Union and the fraud is causing revenue shortfalls large enough that many European Union countries are scrambling to prevent the abuse; and

WHEREAS, introduction of a VAT in the United States indicates that proponents of big government acknowledge that Washington cannot effectively cut spending or reform the ever-expanding number and size of entitlement programs; and

WHEREAS, VAT's and higher levels of public spending greatly limit long-term economic growth; and

WHEREAS, looking for new sources of revenue moves our attention from what can and should be done now, which is to slow or stop spending increases and reform entitlements, sooner rather than later; and
WHEREAS, the VAT is regressive rather than fair or progressive and its levy in addition to income taxes will be to the taxpayer's detriment and to big government's benefit; and

WHEREAS, a federal VAT tax will harm Georgia consumers and businesses; and

WHEREAS, Georgia cannot embrace or endure another level of taxation that is hidden in everyday purchases and transactions.

NOW, THEREFORE, BE IT RESOLVED BY THE SENATE that the members of this body urge the United States Congress not to pass a value added tax for this nation.

BE IT FURTHER RESOLVED that the Secretary of the Senate is authorized and directed to transmit an appropriate copy of this resolution to each member of the Georgia congressional delegation and to Speaker of the United States House of Representatives Nancy Pelosi, Vice President Joe Biden, and President Barack Obama.