Who Says Corporate America Doesn't Want a VAT?

... Trade Reform [,]... distributed by a group called the Coalition for a Prosperous America... pitches the Obama administration and the U.S. Congress something called the AMVATTZ program.

... [T]he "American Manufacturing VAT Trade Zone" idea is to enact federal legislation authorizing the establishment of specialized export trade zones across the United States. Firms operating in these special zones would be exempt from the corporate income tax. Instead they'd be subject to.... a federal VAT.

Hallelujah. We've finally reached the point where intelligent people can discuss VAT without being labelled cheese-eating socialists.

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... VAT is border adjusted. That means U.S. firms operating under the AMVATTZ program would receive a credit for every penny of tax accrued on goods exported abroad. Note that the export rebate is not a loophole or one of those 'tax expenditures' we keep hearing about in the newspaper. The rebate is how VAT avoids double taxation. Exports would leave the United States (the origin country) free of any embedded tax cost, and become subject to tax where they're eventually purchased by the final consumer (the destination country).

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Business leaders have long insisted that VAT promotes exports. Many economists disagree, countering that VAT is merely neutral with respect to export activity...

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... I regard the notion of setting up hundreds of mini-VAT zones across the United States as a silly idea. Why not cut to the chase and adopt a federal VAT outright? I see little merit in limiting the pro-growth benefits of VAT to the few firms lucky enough to operate under the AMVATTZ program.

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View the VAT ***'s opinion in its entirety on TAX.com.

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