Say Hello to Soaring Prices

Paul Volcker (White House economic adviser) has started making noises about imposing a Value-Added Tax.  In simple terms, this means that a sales/VAT tax will have to be paid on everything at every step of the production process. The farmer buys the seeds, he’ll pay VAT tax on it. The farmer sells the food to the distributor, there will be a VAT tax. The distributor sells to a restaurant or grocery store, there will be a VAT tax added. You buy from the grocery store, you might pay a VAT tax.  To disguise the taxes you will be paying on food, they might not have VAT taxes when you buy at the grocery store.

If VAT is passed, I will be turning my entire backyard into a farm to produce food for my family. Of course, I might just do that anyways. More people will be either reducing spending or doing things themselves. Talk about a way to slow down the economy.