4% National Retail Sales Tax
Businesses Should be Taxed at 4% on the
Sales of Goods and Services
updated 4/12/12
Value Added Tax (VAT)
The United States is the only developed country in
the world without a Value Added Tax. The tax is paid at each stage in the
manufacturing and distribution process so that each business gets a credit
for the value of the raw materials and the efforts of the manufactures and
distributers in the supply chain. It has the advantage of not directly
affecting the consumer (although like the taxes paid by all of the workers,
and other production costs are ultimately built into the price).
The experience of other countries has shown that the
tax is easy to administer because each seller and buyer wants to keep an
accurate record of taxes paid.
Paul Ryan’s Roadmap for America’s Future called for
an 8.5% [modified] VAT to replace the corporate income tax. It was not clear
how this would impact the 8 of 10 businesses that were exempt from C
corporation taxes and paid the pass-through rates of the owners. [The Ryan
budget now calls for a 25% corporate tax rate.]
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