Skip to comments.Tax Reform To End Inversions And Grow Economy/Jobs
Posted on 07/08/2014 7:52:46 AM PDT by Citizen Zed
All our trading partners and over 100 countries have moved to a smart form of consumption taxation, the Value Added Tax, which is important as an equalizer in world trade. Subtracted from exports and added to imports, the VAT eliminates the burden of government from the price-value comparison of goods and services crossing borders. The VAT percentage is equivalent to a retail sales tax, differing by being collected at each stage of production. The VAT does not cascade, i.e., there is no compounding of tax at each stage.
The U.S. is at a major competitive disadvantage without a VAT of its own. Our trading partners tack on significant VAT percentages to our goods and services as they cross their borders, a de facto tariff. For example, China adds 17% VAT to their imports from the U.S. and Germany adds 19%, just below the European average. Were the U.S. to replace the CIT by a VAT, it would remove this competitive disadvantage; U.S. exports would be cheaper and our imports, which arrive with the exporting countrys VAT subtracted, would face the same taxes as domestically produced goods and services.
Eliminating the CIT would end the incentive for multi-national corporations to park profits in lower-taxed countries. Forget inversion mergers. With zero CIT, the U.S. would become the lowest income tax country and capital would flow back to our shores. Foreign multi-national companies, too, would seek to move profits retained elsewhere to the U.S. Gone would be the double-taxation of dividends; stock market values should soar.
(Excerpt) Read more at forbes.com ...
NO VAT! It is hidden (embedded in the cost of the goods) and is easily pushed higher by the elitist political ruling class every time they want to further burden and control the “great unwashed” (that’s us) who actually WORK for a living.
THE CLEARLY VISIBLE (stated on EVERY RECEIPT) FAIR TAX IS THE BETTER WAY!
Sorry, I failed to mention that ANY move to a consumption tax MUST be accompanied by the TOTAL REPEAL of the 16th AMENDMENT or as sure as Satan made politicians and bureaucrats, we’ll wind up with BOTH a sales tax AND the income tax.