How Obama plans to pay for Health Care

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People are slowly realizing that the Health Care Bill is going to cost more than projected as it is explained to us. In the reconciliation bill there is the Doctor Fix will cost upwards of 500 billion dollars. The Corn Husker Kick Back is not out but is expanded to cover more states. What happens when the Health Insurance Co quit the business and the Federal government has to pick up the bill? As more and more cost start to appear and the program needs more money where will the money come from? They will look to Europe for guidance. Europe has a unique tax called the Value Added Tax or VAT. The VAT is a tax that is applied to every step of the production of a product. The tax is a percent and usually it is low. Let’s assume a 1% tax. If you are making a car you need steel. When the iron ore is mined a tax is applied to the value of the ore. If the ore is worth $100 a ton then a $1.00 tax is applied. The ore is smelted into iron and the iron and increased the value by $300 and is now worth $401 (the tax is carried over each time and taxes) and the tax is applied and sold for $405.01. The next step is to make the iron into steel. The value of the new steel is now, with the tax added, $611.05. The steel has to be process into sheet steel to make the car bodies. This increases the value to $819.16, with the tax added. In this example the government collects $19.16 in taxes on the steel. If it were a sales tax paid (1% tax) on the final product, in this cas the sheet steel would generate $8.00 in tax while the VAT tax would give them $11.16 more. You can see why they like the VAT tax. In Europe the VAT range is up to 25%. You can see why the government would like this tax. If you figure all the components that go into a car or truck and then tack on 1% more to the final value and all the tax is hidden in the price of the car. Then, when you are signing the final papers to purchase the car the dealer adds the state, county and city sales tax, and you will be paying the sales tax on the value of the car and the VAT tax. The VAT is sometimes called the great hidden tax, because you never know how much you are paying and if the government changes the rate just a little it generates a huge increase in tax revenue.