Will Obamacare lead to new, hidden taxes?

Ever since the passage of Obamacare, columnist Charles Krauthammer has been warning that the only way to fund it will be value added tax (VAT). A value added tax is basically a hidden sales tax: you wouldn't know it was there except by the fact that the price of a product is higher. Unlike a sales tax, it is not taken as a percentage of the purchase price the customer pays, but is taken previously, through a tax on the different steps of production that put it into your hands.

According to Krauthammer, Obama's deficit reduction commission, which will render its findings (as one would expect) after the November elections, is headed inexorably toward recommending a VAT. It is, he argues, a necessary aspect of a socialist system like the one Obama is foisting on the country:

We are now $8 trillion in debt. The Congressional Budget Office projects that another $12 trillion will be added over the next decade. Obamacare, when stripped of its budgetary gimmicks — the unfunded $200 billion-plus doctor fix, the double counting of Medicare cuts, the 10-6 sleight-of-hand (counting 10 years of revenue and only 6 years of outflows) — is at minimum a $2 trillion new entitlement.

With the passage of Obamacare, creating a vast new middle-class entitlement, a national sales tax of the kind near-universal in Europe is inevitable.

We are now $8 trillion in debt. The Congressional Budget Office projects that another $12 trillion will be added over the next decade. Obamacare, when stripped of its budgetary gimmicks — the unfunded $200 billion-plus doctor fix, the double counting of Medicare cuts, the 10-6 sleight-of-hand (counting 10 years of revenue and only 6 years of outflows) — is at minimum a $2 trillion new entitlement.

It will vastly increase the debt. But even if it were revenue-neutral, Obamacare pre-empts and appropriates for itself the best and easiest means of reducing the existing deficit. Obamacare's $500 billion of cuts in Medicare and $600 billion in tax hikes are no longer available for deficit reduction. They are siphoned off for the new entitlement of insuring the uninsured.

This is fiscally disastrous because, as President Obama himself explained last year in unveiling his grand transformational policies, our unsustainable fiscal path requires control of entitlement spending, the most ruinous of which is out-of-control health care costs.

...It radically expands Medicaid (adding 15 million new recipients/dependents) and shamelessly raids Medicare by spending on a new entitlement the $500 billion in cuts and the yield from the Medicare tax hikes.

Obama knows that the debt bomb is looming, that Moody's is warning that the Treasury's AAA rating is in jeopardy, that we are headed for a run on the dollar and/or hyperinflation if nothing is done.

Krauthammer observes that all European countries who have socialized health care have such a tax.

Is Krauthammer right? I guess we'll find out in November. After the debate is over.