The advantages of a VAT to the RST are administrative, and historical. The credit makes it easier to enforce a VAT - there is no advantage to an upstream buyer for downstream producers to evade the VAT because evasion reduces the credit available. Also, the RST has traditionally excluded most services, but the VAT taxes 'value added' which would effectively include all services in the tax base. So the base is broader and enforcement arguably easier, which allows for a lower rate to collect the same revenue
Two big advantages to a VAT over RST - businesses pay a lot of RST, maybe 40%, depending on the estimate, and exported goods include that imbedded RST in the cost, raising the after tax cost for U.S. made goods. With a VAT, 100% of the tax paid during U.S. production can be rebated at the border and goods exported free of VAT, which should increase the competitiveness of U.S. made goods relative to current law. And VAT is fully assessed on all imports.
Last edited by JasperL; 08-28-14 at 01:00 PM.
PORT WASHINGTON, N.Y. (MarketWatch) -- The last thing this economy needs is a value-added tax.
Let's call a spade a spade. A value-added tax or VAT is a sales tax in disguise.
It is not a painless way of raising revenue as some would have you believe.
If anything, a VAT is a painful approach to generating the funds the government needs because of a number of reasons.
First, like any sales tax, it hits the poor much harder than it does the rich. This is because everyone pays the same percentage tax, but since the poor spend all of their income and then some, their overall tax burden will be higher with a VAT than those who are wealthy and thus don't spend all that they earn.
Furthermore, in case you haven't thought of it, the imposition of a VAT would have the practical effect of reversing our progressive tax structure -- the holy grail of Democratic administrations since the federal income tax was enacted nearly a century ago.
Don't fall into the VAT - MarketWatch
Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.
Alexis de Tocqueville
A Canadian conservative is one who believes in limited government and that the government should stay out of our wallets and out of our bedrooms.
And I am sure those people will also be able to come up with many examples where they insist on paying a higher price for something because it will result in paying more taxes.
"We have met the enemy and they are ours..." -- Oliver Hazard Perry
"I don't want a piece of you... I want the whole thing!" -- Bob Barker
My wife and I have gone to many a Tim Horton's in our travels together to ME, NH and VT since the 1980's.
IIRC, they're not just limited to breakfast/coffee etc. either.
Then there's competition from Friendly's also.
As for dunkin donuts, my cousins and Aunts/Uncles got me started there back in the 1970's.
They're even here in my Illinois county.
Have you been to any Blimpie's?
They seemed to be in every small town on US 11 from the VT border through the top of NY all the way to Watertown.
Quite an Amish area on US 11 also .
Chemists Have Solutions .