Posts: 2955
Joined: Mon Jun 26, 2000 5:56 am

Should The US Go To Value Added Tax (VAT)?

Sun Oct 13, 2002 3:31 am

In the US our prices on most retail goods and services are marked and advertised without the tax included. Would there be any harm in just including the tax in the advertised price on most low dollar everyday-type goods and services?

The only good reason I can think of for not switching to VAT is confusing foreign tourists and the different tax structures across state, county and even municipal boundaries, so like McDonald's couldn't advertise a $1.00 Big Mac unless they were willing to eat the cost of the higher taxes in places where they were higher. And in that case, the government might as well raise taxes since consumers wouldn't know the difference.

Posts: 2586
Joined: Mon Aug 28, 2000 10:58 am

RE: Should The US Go To Value Added Tax (VAT)?

Sun Oct 13, 2002 5:28 am

When I was in the UK It was a refreshing relief not to see the typical "$1.99 + tax" signs.. It was all rolled in. But when that's all rolled in you kinda dont know how much youre really paying in tax.
Posts: 7591
Joined: Fri Feb 18, 2000 3:12 pm

RE: Should The US Go To Value Added Tax (VAT)?

Sun Oct 13, 2002 6:02 am

In all honesty you don't really know what you're paying in sales tax in the US anyways, as it varies so much across city, state and county lines... as well as on certain products. Some areas charge sales tax on food, others don't, sometimes in the same state even. Certain goods have a higher sales tax than others. For example in Arizona sales tax is 7.6%, but on hotels and rental cars it is 12.6%. That was always a shock to people when I used to work at an off-airport rental car company. But then here in Virginia sales tax is a pretty low 4% and food items are not taxed statewide.

Frankly, the VAT still confuses me as to how it works. All I know is that in the UK it is typically around 17% at the final sales end and is a decent bit less regressive than sales taxes. I would be supportive of it if it was less regressive than a sales tax and more elastic in terms of revenue generation. But then my big concern is that it would be likely impossible to implement a VAT given the extensive taxing authority of the states. I'd suspect VATs are easier to implement in non-federal systems.
Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia

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