VAT tax?

[RightinNYC]

I'm curious to hear the prevailing opinions on the pros and cons, as well as the viability, of implementing a VAT tax here in America, either to supplement or replace income taxes.

Any takers?

 

[Squawker]

If I knew what a VAT tax was I might. My preference would be a flat tax, or use tax for people earning over 50 or 70 k

 

[Pacridge]

If I knew what a VAT tax was I might. My preference would be a flat tax, or use tax for people earning over 50 or 70 k

Value Added Tax (VAT) is a general consumption tax assessed on the value added to goods and services.

It is a general tax that applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services. It is a consumption tax because it is borne ultimately by the final consumer. It is not a charge on companies. It is charged as a percentage of price, which means that the actual tax burden is visible at each stage in the production and distribution chain. It is collected fractionally, via a system of deductions whereby taxable persons (i.e., VAT-registered businesses) can deduct from their VAT liability the amount of tax they have paid to other taxable persons on purchases for their business activities.

 

[Squawker]

I have a sub-chapter S Corp. Why might I want a VAT instead?

 

[Pacridge]

I have a sub-chapter S Corp. Why might I want a VAT instead?

Not sure you would benefit. Here's an article from a Conservative Think Tank that doesn't think much of the VAT idea.

http://www.freedomworks.org/informed/issues_template.php?issue_id=2201