In Your Pockets

" President Obama has told -- anyone not raise taxes on middle class Americans. But does the president have a secret hidden tax agenda. Let's take a look at some recent statements John Podesta. Bill Clinton's former chief of staff and -- president's President Obama -- regular outside advisers. Recently told -- Bloomberg News reporter. That -- value added tax is quote more plausible today than ever and that quote. There's going to have to be revenue in this budget. Earlier this week the Center for American Progress a liberal think tank where speakers like Paul Krug and -- the same John Podesta. Once again spoke and all agreed. That taxes on everyone will soon have to be -- joining me now is Chris Edwards. From the Cato Institute Chris has just launched. A new website called downsizing government dot org. Which shows exactly where and exactly how your taxes are being spent in the barriers and -- some federal agencies. Chris is also the author of global tax revolution. The rise of tax competition. And the battle to -- Chris welcome -- freedom watch. Thanks -- can the president keep his promise. Of waging a war in Afghanistan. Spending a trillion dollars which will be revenue neutral. On federal health care and not raising taxes on people who earned 250000. Dollars or less."

" Well look I only congress can cut spending anytime it wants people often say -- we have a trillion dollar deficits. -- going forward by -- we just can't cut spending all of course congress can cut spending I mean at the end of the Cold War for example in the early 1990s. We massively cut defense spending why because members of both parties got together and they agreed we didn't need such a big military budget. And they -- well you can do that with domestic spending as well and the purpose. Of my downsizing government dot org web site is to go through the budget line by line. Point -- the agencies that are wasteful and unneeded and to propose cutting them so congress can cut anytime -- want."

" But but is this realistically likely to happen -- we just got -- presidency a madam Deborah Republican for eight years. During the first six of which the congress was controlled. By Republicans. This president George W. Bush called himself a compassionate conservative. And on many social issues -- truly was a conservative. But he spent money like. There was no tomorrow he probably spent more than almost all of his predecessors combined -- federalized education. He federalized prescription drugs for seniors he fought a war but a lot of us believe was not only -- moral but -- illegal. And he did it by by borrowing money for it. If they're Republican. President where they Republican congress can do that. God help us where they a self proclaimed liberal Democrat president and live."

" you know I is great. I agree with everything you said -- you know the overall numbers. Our in eight years President Bush increase the federal budget 68%. President Clinton over eight years increased it less than half of that only 32%. So. You're right about the parties however. You all Americans are extremely resistant to tax hikes we have an added tax -- now and you know about sixteen years other Republican Party is pretty unified against tax increases so the battle ahead the budget battle ahead is gonna be gigantic it is going to be the biggest budget battle we've ever seen in this country. Because the trend the revenues and spending are just on completely different paths here so. You know you know John Podesta talk about adding value added tax -- United States boy that will be a big battle United States. Is the only major industrial country without -- back. And frankly a you know be blood differ on -- you know I think -- freer more prosperous country because we don't have a bat and I think Americans will ultimately rejected new. Tax system like of that though it only as a gimmick battle."

" When when you say that you're using the acronym for value added tax and value added taxes that's right fancy word for sales tax on just about everything under the sun. Which our cousins in Europe have reluctantly become accustomed to since World War II."

" That's exactly right -- the European common market in the sixties decided that they were all -- value added that taxes which are like. Our retail sales taxes so the average retail sales tax or back in Europe these days is 20% so you know Europeans go to buy cars -- TV -- or food or anything else they paid 20%. On everything. That's on top of all the income taxes they pay. I can't believe that America is gonna go down that road. I think that there again there's going to be a gigantic battle I think -- we will resist tax hikes. I mean we already see that you know President Obama might be able to sneak through some with some tax hikes on income on the highest income Americans which would be bad policy but you know he has -- majority congress. I'll probably be able do that. But you know after that he has made strong promises he won't hike taxes on the middle class I think we're gonna hold onto that I think is gonna have a real difficult time."

" We're chatting with Chris Edwards from the Cato Institute I'm gonna let my libertarian hair down. For this last question does anybody ever argue that taxation is theft. That the fruit of -- your labors are yours. That at some point it's just -- against the natural law against common decency and morality. For the government to take such a huge portion of everything we currently works so hard for and that may be the government should be financed. By user fees that are wanna service from the government I pay for it if I don't wanna service from the government I don't know -- anything."

" You know I don't think taxation is -- that if it is for -- that the limited constitutional reasons why we all that we all agreed on 1787. You know the the defense the Census Bureau basic constitutional things I don't think it's that but it sure is that. To take my money and give it to farmers who are wealthier than me. Or the wealthy corporations. That is -- in my view but you know that's not you know. -- Yeah let's put that battle outside of -- the real issue is its most federal spending in my view is damaging it's unfair. And it's un needed. And it's also you know goes against -- their constitutional grant of federalism I mean. The founders thought that the federal responsibility should be few and defined because there were very practical man they knew that it made no -- centralized spending on things like education and highways. In Washington these ought to be state and local activities."

" Chris Edwards from the Cato Institute thanks for joining us on freedom watch. Thanks --"