Below is the text of a press release the campaign sent out this morning regarding recent talk of imposing a Value Added Tax (VAT), which is a European-style national sales tax.

Earlier this week, White House advisor and former Federal Reserve Chairman Paul Volcker said that the United States should consider implementing a Value Added Tax as a means of combating mounting debt. Today, Republican senatorial candidate and financial advisor Don Bates Jr. responded to the mounting wave of support in Washington for a national Value Added Tax. “The solution to solving our fiscal problem is not implementing a new, back-door tax on the American people.  The answer is to cut federal spending and return government’s focus to a more limited scope of priorities,” Bates said. 

Bates explained how the VAT would harm Indiana saying, “according to the IRS, Indiana taxpayers paid $42.1 billion in federal taxes in 2008. If Democrats and the Obama Administration decide to pay for their unrestrained spending with a 10% VAT, Indiana taxpayers will end up paying roughly $21 billion in additional federal taxes every year.”

“European nations have experimented with value added taxes, and their record gives us an example of what we can expect if such a tax is imposed here,” Bates remarked. “VATs have proven to be a one-way ticket for governments to raise taxes across Europe, and that in turn has led to a stifling of economic productivity.” Bates cited Spain as an example saying “they have had a VAT for a number of years, and today their unemployment rate stands at nearly 20%. That unemployment rate is substantially the result of higher taxes and more regulations, and those two things are inevitable with the onset of a VAT.”

“Washington spends too much, and the answer to the deficit and the daily accumulating mountain of debt is to cut spending, not find yet another way to tax hardworking people. I pledge to voters that I will oppose any attempt to pass a VAT, and I will fight for a reduction in spending and not a new, back-door national sales tax,” Bates concluded.

By: Don Bates Jr.

The President created a stir among the environmental left this week when he announced the opening of certain coastal areas to off-shore oil exploration.  Proponents of stringent regulations banning, or severely limiting, the development of off-shore and other forms of domestic oil and natural gas production are expressing deep frustration that the President who expressed support for their position on the campaign trail has seemingly turned on them. Meanwhile, some who have been promoting the idea of national energy independence, in part by way of domestic oil exploration, are wondering if the President has moved us one step forward in the right direction.

While I would like for the President to abandon the politics of environmental alarmism and embrace the common-sense solution of allowing environmentally responsible domestic energy resource development, I am not happy with this latest policy move by the Administration. Strong and vibrant on its surface, this plan will not do enough for our needs, and it may end up do nothing at all.

Nearly two summers ago Americans saw an already struggling economy get socked with high energy prices, particularly gasoline prices. This energy price increase compounded a growing problem, and American industry, agriculture, and families suffered. When the economy slowed down still further, and as workers lost their jobs, energy prices began to come down. However, our nation is still in need of an energy independence policy that embraces domestic energy development as a means of assisting the economy, creating jobs, and strengthening our national security.

President Obama’s plan gives the green light to exploration in limited coastal areas, but it does not give a green light to actually producing oil and natural gas from wells in those areas. Unannounced to the American public, the Administration has recently closed areas in Alaska that would have been ready for full production of oil and natural gas within two years. These areas were much closer to coming on line and helping to meet the energy needs of our country than the areas that were just opened for exploration. It takes years, sometimes decades, for exploration to turn into production. Opening up areas for exploration while shutting down areas that are close to being ready for production, is not serious energy policy, it is serious Washington politics.

By: Don Bates Jr.

If the Democrats were hoping for a groundswell of support after they passed their health care reform bill, I’m afraid they are being sadly disappointed. As we find out more and more what was in the actual bill that passed, some special interest groups are upset, and Americans continue to voice their objections to both the overall principles behind the bill and the specific policies it contains. One point that I have made repeatedly is that as Congress spends more money that we do not have, it threatens the very ability of our country to continue to borrow money at affordable rates. That concern is now being voiced by conservative writers and business analysts alike.

Working for over a decade and a half in the financial industry, I know what works and what doesn’t work. But you don’t have to be in the financial industry to know that the concept of forever borrowing and never repaying is a bad idea. Every single Hoosier, every single Hoosier family, farmer, and employer knows that unless you learn to live within your means, and not borrow unreasonable levels of money that you can’t repay, you will face financial ruin. In the days ahead I will continue to promote common sense policies for some of the greatest fiscal and economic issues facing our nation. It’s time for Washington to wake up, and start living within its means like millions of Hoosiers do every day.

By: Don Bates Jr.

Today, and for the past couple days, the President has been speaking about the need to pass healthcare reform.  Unfortunately, the reform he is talking about amounts to a massive government takeover of our healthcare system.  He and his party have told the American people that the latest attempt to pass reform on Capitol Hill combines, or will combine in the near future, the best that each party in Congress has to offer.  However, a careful look at what is actually being negotiated reveals a very one-sided approach to the problem.  In fact, some of the biggest changes in this new plan are expansions of the very worst proposals contained in past plans.

When the American people had time to dig through the healthcare bill that passed the Senate, they found what has now become known as the “Cornhusker Kickback.”  That provision was a special favor that Sen. Ben Nelson (D) gave his home state of Nebraska.  Understanding the impact of massive new unfunded mandates that the federal government was placing on the states, Sen. Nelson conveniently found a way to channel hundreds of millions of dollars in federal money back to Nebraska to subsidize the new program.  Instead of stripping out such pork barrel spending, the newest healthcare bill actually offers that subsidy to every single state.  When you have a bad idea, the last thing you should do is expand it by 50 times!

But for all the talk of healthcare reform, one fundamental issue is being overlooked by Democrats and the Administration in Washington. As bloated with wasteful spending as this single piece of legislation is, it doesn’t begin to compare to the overall growth of the federal budget under this President and this Congress.  The non-partisan Congressional Budget Office just released estimates that President Obama’s budgets will run an $11.3 trillion deficit over the next 10 years.

As a financial advisor and someone with experience in business and finance, I know when the numbers don’t add up.  An $11.3 trillion deficit over the next 10 years does not add up to jobs created, an economy built, and a future of prosperity for Indiana and for our country.  It is time for Washington to stop the spending.  On Saturday at the Warsaw debate I pledged to abstain from pork-barrel spending if elected, and to fight hard to reign in the size of government.

It’s time for Indiana and for America to get to work, and we won’t create jobs by more than doubling the national debt in a dozen years.  If elected, I will go to Washington and use my knowledge of what it takes to create jobs, balance budgets, and make an organization fiscally sound to rein in spending and protect the future of our country.  Let’s get to work!

Let's Get to Work

Just the other day it was reported that the US Postal Service is facing a $238 billion budget gap over the next 10 years. Narrowing the shortfall will necessarily involve serious changes within the postal system. Some of the proposed changes have ranged from privatizing the system outright (difficult to do because, as others have pointed out, the USPS business model is not lean and efficient), to cutting mail services on Saturday, and raising the price of postage (yes, again).

Five to ten years from now we can look at how the Postal Service is doing and judge whether or not the reforms undertaken by Washington actually worked. If they don’t work, or even if nothing is done and we end up with a $238 billion in more debt, the problem will still primarily be a fiscal problem. But if Washington plunges forward “reforming” healthcare to put government – and not patients – first, five to ten years from now we will be looking at a problem that is not only involving finances, but more importantly, the future of families.

The futures of families around the state of Indiana are at stake with the current healthcare debate and the debate over our economy. Lost in the middle of all the talk of healthcare reform is the topic of building a healthy economy. Creating jobs must be priority number one for rebuilding a healthy economy, and as long as the majority party Washington keeps trying to pass a government take-over of your healthcare, they are taking their eye off the priority of creating jobs.

Some experts have tried to say that we are experiencing a jobless recovery. That is not a recovery, and that is not the kind of recovery that Hoosier families need. We need a recovery that starts by allowing employers to create jobs and put people back to work; by doing that, we will strengthen the future of Hoosier families. That’s why I am running for United States Senate.