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Unleash Prosperity Hotline
Issue #1197
02/06/2025
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1) The VAT In the Hat

The chart below shows that 175 countries have value-added taxes that are imposed on everything that is imported from the U.S. That includes virtually every nation in the world and literally every OECD member besides the U.S. The VAT is just a sneaky version of a tariff.

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This backdoor tariff is on top of their corporate taxes and personal income taxes. The VAT tax is one of the reasons that Europe has flatlined economically for three decades and businesses keep escaping. Their VATs fund their giant welfare states, socialized health care systems, and government spending of 40 to 50% of GDP.

Thank GOD America isn’t burdened with a VAT and thanks to Grover Norquist of ATR for keeping this add-on tax off of these shores.

We raise this point because, although we don’t favor tariffs, the Europeans, Canada, China, and others have a lot of nerve to accuse Trump of starting a trade war with his 10 to 15% tariff talk. Most of our trading partners are at 10 to 20% VATs with tariffs on top of that. So they should just shut up with the self-righteousness.

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2) Congress Playing a Most Dangerous Game on Trump Tax Cut

The House was expected to unveil a budget resolution this week that would contain the reconciliation instructions needed to move forward on a Big Beautiful Bill, including the Trump Tax Cuts 2.0 and other key agenda items. It didn't happen.

Now there are rumors that the Senate may take the lead on a slimmed-down reconciliation bill that punts the tax debate to the fall.

This strategy makes no sense to us. The tax bill should be a first 100- or 150-day agenda item. Each day they wait, the more likely progressives will find a way to derail the tax cut and the more nervous investors get that it will happen at all.

Remember: failure is not an option. If Congress strikes out here, the average family will pay a $3,000 tax hike. This is a very good plan for conservatives to get run out of town in the midterm elections in 2026.

If they whiff on getting the tax bill done, they will deserve it.

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3) Red States Forming DOGE Commissions

Trump Derangement Syndrome has morphed into a new mental health condition. Progressives now also have Musk Derangement Syndrome.

Minnesota Rep. Ilhan Omar isn't mincing words: "This is what the beginning of dictatorship looks like." Others are huffing that Elon Musk is leading "a corporate coup."

Yes, a coup against big fat bureaucratic government.

Now, Red State governors and legislatures are taking a page from DOGE's playbook and creating their own state versions.

In Oklahoma, Gov. Kevin Stitt has created DOGE-OK to transform the state's outdated information systems. In New Hampshire, Gov. Kelly Ayotte has created a "Commission on Government Efficiency" (COGE) to streamline government. Louisiana Gov. Jeff Landry has formed his own state "Fiscal Responsibility Program." Republican legislatures in Idaho, Texas, Kansas, and Missouri are creating special DOGE-like committees. Some states with liberal governors but GOP legislative majorities - Wisconsin, Arizona, and North Carolina - are doing the same.

This is the last thing the Left wants: a search-and-destroy mission when it comes to government waste and fraud.

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4) Google Abandons Racial Preferences

Google is the latest big company to announce it is complying with Trump's anti-DEI executive order by scrapping its diversity targets. Target, Meta, Walmart, and McDonald's have already made similar announcements. Trump is making nondiscrimination great again.

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5) Is Boston the Next Big Blue City to Try to Heal Itself?

Decades of bad governance in major U.S. cities by progressives resulted in rising crime, the incompetent delivery of services (think the recent Los Angeles fires), and a flight of people and businesses.

Beantown may be the next city where voters stage a coup against progressive ruin - joining the ranks of deep blue cities like San Francisco, Seattle, Detroit, and others that voted in moderate, pro-business Democrats.

This week, Josh Kraft, who has run the Boys & Girls Clubs of Boston and whose father owns the New England Patriots, announced he will challenge Boston Mayor Michelle Wu this November. Wu is a progressive darling who is a Green New Deal fanatic, for years supported dismantling the Boston Police's gang database, and backs strict rent control measures.

Kraft says he will contain the city's wild spending growth, pause the city's skyrocketing $100 million plan to rehab a stadium, and provide a cut in real estate taxes that will in turn help keep rents down.

America's cities are worth saving, but it will require sensible, pro-police, and pro-growth policies to bring them back as Rudy Giuliani did for New York 30 years ago.

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6) Where All the Foreign Aid Money Went

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