VAT Mania

I think it is fascinating to hear so much discussion today about the need for a VAT in the US. All other industrialized countries have a VAT. In fact a VAT is used in over 140 countries today. So, there is a lot of data out there on its effect on the economy, administration, etc.

I don't see that a VAT could replace any federal tax as some propose. But, perhaps as an additional tax that would allow for reduction in the income tax or payroll tax, it could help reduce the deficit (along with spending reforms!).

I have a short article in the AICPA Corporate Taxation Insider today - VAT Mania, with some background and links to additional information, including a website I've maintained for some time that explains how a VAT works and compares it to a sales tax (here).

While the Senate recently passed a resolution opposing a VAT (see link in article), I think that is unfortunate. We should not dismiss something so widely used in the world AND that is already on the table in the US in other forms. Did you know that the "flat tax" is a modified subtraction method VAT? Did you know that the national sales tax is not as efficient in operation as a VAT, but both can raise the same amount of revenue? See links above for details.

What do you think of a US VAT?

VAT Mania 2010-04-29T12:39:00-07:00 Rating: 4.5 Diposkan Oleh: Unknown