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Pepper Commentary: To VAT or Not to VAT

That, indeed, is the question. February brought the American Recovery and Reinvestment Act of 2009. Medicare and Medicaid costs are rising. Social Security is facing bankruptcy. Universal health care coverage is proposed. Trillion-dollar deficits are projected for the foreseeable future. Taxes...

VAT: Touching the Ultimate Third Rail

As the U.S. is virtually the only industrializad nation without a value-added tax, the VAT is viewed largely by American citizens as an abstraction... at least for now. But wait until it becomes part of the tax regime landscape! Sticker shock of monumental proportions awaits Americans when a VAT is introduced...

A Ransom Note to America

To: The Citizens of the United States of America From: The Bond Market Date: 2010 Re: Urgent Hostage Situation Dear Citizens: By now you may have noticed that you have NO FUTURE. It's gone, missing, vanished. We have seized it -- together with your children's and grandchildren's future. They...

VAT vs. The Bag Lady

Some readers argue passionately against a Value Added Tax (VAT) on the grounds it flunks what they call the "Bag Lady Test." I'm guessing many of you haven't heard of the Bag Lady Test. It's not something they teach in LLM tax programs, but it's quite real. It goes like this...

Japan's Debt Crisis: VAT to the Rescue

Japan's economy could soon be ravished by a savage beast. This time the monster takes the form of public debt. No less a figure that Japanese Prime Minister Naoto Kan recently warned that the economy could " collapse " due to the combined effects of Japan's massive debt burden and an...

While Japanese Business Leads on Tax Reform, American Business Wimps Out

... [T]he approach taken by big business in Japan ... has advocated a substantial hike in Japan's value-added tax rate (currently at 5 percent) and a substantial cut in Japan's corporate tax rate (hovering at about 40 percent). The business federation's effort appear to be paying off. The...

The End of the World as We Know It

We recently read Roy Cordato's vivid synopsis of what a VAT would mean for the American public. His article appears on the website, The Moral Liberal . ... Cordato... offers his frank opinion on the merits of VAT..."a pernicious and insidious tax," ... that... "poses a fundamental...

Value Added Tax (VAT) Fundamentals, How VAT Principles Work in Practice, and Prospects for a VAT Regime in the U.S.

On this edition, Bob Goulder discusses the essential elements of Value Added Taxation (VAT), and why the introduction of a VAT is being considered by Congress. Mr. Goulder examines how VAT principles are applied in the vast majority of industrialized countries, and the potential impact of a VAT on American...

Heretic! Apostate! "So-Called" VAT Lover!

Pity the lost soul of Mitch Daniels. Long a paragon of virtue and morality, he has strayed from the True Faith. In a recent speech to conservative bigwigs , Daniels suggested that a value-added tax, coupled with a flat-rate income tax, might be a reasonable basis for tax reform. For this unpardonable...

Mitch Daniels Talks VAT

Indiana's Republican Governor Mitch Daniels wears leather, rides a Harley-Davidson motorcycle, and once fished discarded quarters out of a toilet bowl so he could pay for a beer. (Okay, not your typical Princeton graduate, but points for originality.) We're talking about Daniels because of his...

Twelve Steps to Tax Reform

. . . . (1) Get conservatives to recognize tax expenditures as government spending. Relabel "tax expenditures." Call them "tax earmarks." . . . (2) Get conservatives to recognize base broadening as an alternative to a VAT. . . . (3) Get corporations to recognize base broadening...

Herman Cain's 999 Plan: Stepping Stone to a VAT?

GOP presidential candidate Herman Cain is promoting fundamental tax reform. Bravo! Somebody needs to do it. Like most ideas designed to appeal to Joe-the-Plumber types, Cain's proposal is charmingly simple yet fundamentally flawed. It's called the " 999 Plan ." It would repeal the current...

A Grown-Up Conversation About Corporate Tax

Nothing is more fun for liberals than to catch a big multinational abusing U.S. tax laws. Google, Cisco, General Electric, and Apple -- to name a few -- now have public relations problems because the press has put a spotlight on their use of offshore tax havens. The tax dodging is disgraceful. The worst...

Does America Need A Two-Page Tax Code?

Emphatically, no. I just absolutely disagree with Fareed Zakaria on this , as I do with anyone who thinks that the measure of a tax system is the shortness of its tax code. We live in a complex and intricate world, in which transacting involves complex relationships involving the allocation of risks...