New taxes to pay for health care reform.

• Position: Your Life

As economist Milton Friedman used to say: There is no such thing as a free lunch. This especially is true when talking about "government" picking up the bill for "everyone's" health care. Any such overhaul is going to cost money--a lot of it, warns John Nothdurft, a budget and tax legislative specialist for The Heartland Institute, Chicago. Most analysts estimate the cost of the proposals being considered by Congress as ranging between 1.2 trillion and 1.6 trillion dollars over 10 years.

There are four main sources of revenue being considered eider alone or in various combinations: a value added tax (VAT); surcharge on high-income earners; various "sin" taxes; and individual and business coverage mandate penalties. Each of these carries its own unique set of detrimental effects, Nothdurft explains.

Value Added Tax. This essentially is a sales tax applied at each stage of production instead of only at the final point of purchase. This could be the largest tax hike in history because a value-added tax would unlock a new mechanism allowing the Federal government to take a massive amount of additional money out of taxpayers' pockets at each stage of health care.

Surcharge on the "rich." The revenue-generating mechanisms in H.R. 3200 supposedly will raise a staggering $544,000,000,000 over 10 years, according to the House Ways and Means Committee. When you add this 5.4% surtax to Pres. Barack Obama's budgeted tax increases on the top two income brackets, the average top tax rate would be more than in France and "higher than all but three countries in the Organisation for Economic Co-operation and Development: Denmark (60%), Sweden (56%), and Belgium (54%)," according to the Heritage Foundation, Washington, D.C. That would be a job killer because many small businesses pay income tax through the individual tax system.

In addition to the obvious economic impacts, there is concern over the reliability of funding based on taxing only 1.2% of the population--the "rich." States such as California, New Jersey, and New York rely heavily on hefty taxes on high-income earners, and each of these states faces abnormally high deficits when compared to those employing broader, flatter tax bases.

"Sin" taxes. The call for new Federal "sin" taxes on soft drinks, plastic surgery, video games, etc., means higher taxes and more control for politicians over our personal decisions. It uses tax policy to discriminate against certain legal products such as soda, when...