Why a VAT Tax Is Where It's At

The article "Why a VAT Tax Is Where It's At", found at BusinessWeek.com, discusses how a VAT would help stop the United States national debt from skyrocketing even further. As Baby Boomers are set to retire, the United States government is faced with the arduous task of supporting many programs, such as MediCare and Social Security. The author truly believes a VAT can help solve some of the current financial problems in the United States. A VAT, which stands for value added tax, is collected at each stage of the production process and distribution rather than just from retailers. Not only is this type of tax highly efficient, but the way it is collected also minimizes compliance problems. However, there is opposition to the idea of enforcing a VAT tax. Some believe this tax would make the government even bigger than it already is. According to Americans For Tax Reform member Grover Norquist, "VAT is French for big government." The author points out that nobody really defends the current income system anymore because it is far too complicated and contains too many loopholes and special interest favors. It is time for the VAT to be embraced and long term fiscal discipline in the United States to be back on track.