AccessMyLibrary provides FREE access to over 30 million articles from top publications available through your library.
Create a link to this page
Copy and paste this link tag into your Web page or blog:
A vat of trouble.(the problem with value-added tax)
THE economics literature has demonstrated that taxing consumption is preferable to taxing income. In a recent review of the literature that I coauthored with Berkeley economist Alan Auerbach, we found that a wholesale switch to a consumption tax would increase real GDP by about 10 percent over ten years. Put differently, GDP today may be about 10 percent lower than it would have been if we had adopted a consumption tax ten years ago. Accordingly, it is urgent that the United States move toward a consumption tax as soon as possible.
Consumption taxes come in many forms, but they have one thing in common: They impose taxes when income is consumed, but not when it is saved. This rewards savings, and spurs economic growth. The most common type of consumption tax worldwide is the Value Added Tax, or VAT. The VAT is employed by many countries around the world, and is compulsory in the EU.
As the accompanying chart indicates, European countries that rely on VATs have tended to increase them over time. The average VAT revenue in Europe increased from about 6.9 percent of GDP in 1995 to about 8 percent of GDP in 2005. Currently, standard VAT rates range from 15 to 25 percent.
An optimist might say that this increasing reliance on the VAT is a good thing, a form of gradual tax reform. Wholesale adoption ...
- Implementing a progressive consumption tax: advantages of adopting the VAT...
- Magazine article from: National Tax Journal Grinberg, Itai December 1, 2006 700+ words
...Panel) based the consumption tax portion of its...added tax (VAT) in a manner...the X-tax, VATs are almost always...Credit-method VATs are a successful...On average, VATs provide about...for calculating VAT liability. While...subtraction-method consumption tax ...
- The aches and pains of transition to a consumption tax: can we get there from...
- Magazine article from: Virginia Tax Review Goldberg, Daniel S. January 1, 2007 700+ words
...which is analytically equivalent to a VAT, (3) a two-tier consumption tax based on a VAT, and (4) a yield exemption tax...in the VAT discussion. A two-tier consumption tax based on a VAT is largely an indirect tax, with a...
- The consumption tax - to be or not to be. (column)
- Magazine article from: The National Public Accountant Barr, Dorothea March 1, 1991 700+ words
...a value-added-tax (VAT) or consumption tax is an inevitable solution. VAT is a tax imposed on the...and argue the merits of a VAT, many have said that it...Simple in concept, a consumption tax is a method of obtaining...
- The international implications of consumption tax proposals.(Symposium on...
- Magazine article from: National Tax Journal Grubert, Harry Newlon, T. Scott December 1, 1995 700+ words
...value-added tax (VAT), i.e., tax...income tax, or other consumption tax variants, where...effects of an income VAT, which differs from a consumption VAT in that capital...foreign income under a consumption tax, including exemption...
- The treatment of financial services under a broad-based consumption tax.
- Magazine article from: National Tax Journal Jack, William December 1, 2000 700+ words
...a broad-based consumption tax such as a value added tax (VAT). The main problem...be taxed under a consumption tax, and Quiggin...a broad-based VAT. I assume that...underlying feature of a consumption tax that we wish to...
- Review of 1989-1990 consumption tax activity.
- Magazine article from: Tax Executive DeLuca, Michael A. March 1, 1990 700+ words
...Review of 1989-1990 Consumption Tax Activity Consumption...value-added tax (VAT) surfaced early in...nevertheless concluded that a VAT would be difficult to...tax: A broad-based consumption tax would have definitional...difficult. Holling's VAT Buoyed by the pressure...
- Comment on Grubert and Newlon, "The International Implications of Consumption...
- Magazine article from: National Tax Journal Avi-Yonah, Reuven S. June 1, 1996 700+ words
...proposals to adopt one of several consumption tax regimes in the United States...result of the switch to a consumption tax. However, the decline in...OF A DESTINATION-BASED CONSUMPTION TAX In Avi-Yonah (1995b...based value added tax (VAT) like the USA business tax...
- NRF board plans to fight consumption tax plan.(National Retail Federation)
- Magazine article from: Daily News Record Barrett, Joyce June 7, 1995 700+ words
...congressional support for a consumption tax, the board of directors...never been supportive of a consumption tax," said John Dill, NRF...encourage savings, which a consumption tax would do, according to Laurance...proposed implementation of a VAT. Sen. Trent Lott (R...
