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.

In my previous post, I mentioned my concern over the President’s disingenuous approach to energy policy and national energy self-sufficiency. Thankfully, the President’s path is not the only path available to us. One of the most important options that we should pursue, and that we are not pursuing now, is the development and production of coal-to-liquid fuels. In a state like Indiana where coal is abundant and the need for job creation exists, a coal-to-liquid fuel industry would help move our country towards energy independence, create lower gas and diesel prices for consumers, and generate more jobs for Hoosier workers.

Coal-to-liquid fuel has been successfully produced and used by other countries, yet our nation has never needed to pursue it as an alternative to petroleum because of the abundance of relatively cheap, imported oil. The days of cheap, imported oil are over, and that leaves us with a choice between the development of every resource that we have, from oil, natural gas, coal-to-liquid, to other biomass-type fuels, or a continued reliance on unreliable, costly petroleum imports that frequently come from unstable regions and regimes around the globe.

Indiana is one of the top ten states in the country for coal reserves with more than 18 billion tons of recoverable coal yet to be mined. Over 3,000 Hoosiers work in the coal industry and in 2008 they mined over 35 million tons of coal. If coal-to-liquid fuels were to become part of our national strategy for energy self-sufficiency, jobs would be created in the building and operating of new plants that could turn the raw coal into the liquid fuels of gasoline, diesel, and jet fuel. Additionally, our entire economy would benefit by being close to the production of this alternative fuel that is potentially more cost-effective that refined petroleum fuels.

What the next senator from Indiana needs to do is work to reduce regulatory barriers that stand in the way of the development of this exciting technology. The Department of Defense and other federal agencies need to be allowed to enter into contracts for the purchase of coal-to-liquid fuels, companies that want to build the refining and conversion facilities must be allowed to accelerate the tax-depreciation of their new facilities, and investors across the board must be given a lower capital gains tax. The last policy would benefit every kind of investment, and emerging technology and industry sectors such as coal-to-liquid would stand to be among the greatest beneficiaries of such a plan.

Hoosiers are hardworking pioneers, and I am ready see Indiana lead the way towards energy self-sufficiency. It can be done. We have the resources, we have the ability to develop the technology, and we have the work-ethic necessary to push forward and lead our country into the future in energy policy. Let’s get to work!

While the ultimate fate of the health care bill will rest with the next Congress and the next Administration, the immediate working limiting the bill’s negative impact on the American economy begins now. Indiana Attorney General Greg Zoeller, a capable and veteran legal expert, has joined 13 other state Attorneys General in challenging elements of the health care reform bill in the federal court system. The primary thrust of Zoeller’s and other AG’s challenge is that Congress cannot lawfully use its Commerce Clause power, found in Article I of the Constitution, to force the American people to buy a commercial product or face tax penalties.  Further, they argue that Congress overstepped its bounds in ordering the states to set up insurance exchanges that will function along the lines of federal regulations and federal law.

Both of these legal approaches to the un-Constitutionality of the health care bill are sound, and the several AGs should be commended for vigorously pushing forward this challenge. Don specifically commented on Attorney General Zoeller’s joining of the fray by saying:

“The Attorney General’s decision to challenge the health care bill’s legality marks a step    in the right direction for the people of Indiana.  Although the motives behind the health       care bill’s passage were laudable, the specifics in the bill stand in stark contrast to our founder’s vision for our country. We cannot afford the $2.5 trillion price tag of this legislation; and we cannot afford to surrender our freedom, the quality of our care, and the innovation of our medical professionals to the aims of government bureaucrats.”

Ultimately, what the AGs do will only limit the severe and far-reaching consequences of the government takeover. It is very unlikely that they will be able to achieve a full repeal of every bad policy contained in the bill, and rightfully they shouldn’t achieve a full victory in a courtroom.  Some elements of the bill are blatantly counter to Constitutional principles, and as such they should be ruled illegal. Other elements are bad policy that will result, or are resulting, in unacceptable outcomes. Those policies must be rolled back and repealed in the halls of Congress and that is why this election is so important!

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.