Misery Loves Company: United States Talking About Value Added Tax
Many U.S. news outlets are reporting that U.S. White House economic advisor, Paul Volcker, spoke today about the possibility of the United States implementing a value added tax ("VAT") at the federal level.
- CBS - VAT: Will the U.S. Adopt a Value-Added Tax?
- Fox News - Obama Economic Adviser Says U.S. Should Consider 'Value-Added Tax'
- Reuters - Volcker: Taxes likely to rise eventually to tame deficit
- New York Times - Will We Get a V.A.T.?
About 150 countries have a VAT. It comes in different shapes and sizes, ranging from 5% in Canada (down from 7% thanks to the federal Conservative Party) to 25% in Sweden. Wikipedia has a great summary of who has what value-added tax and the rates. Canada's value-added tax is called the goods and services tax ("GST"). New Zealand and Australia also have GST. The EU has a value added tax called VAT.
If the United States moves towards a value added tax regime, there are a number of qualified, English speaking lawyers, accountants, consultants in Canada and ex-Canada Revenue Agency officials who would like a green card (preferably in a warmer State where there are no hurricanes). The Canadians will potentially sign cards saying "Trust us. it's not so bad: At least you do not have States adopting the HST like Ontario and British Columbia".
Cyndee Todgham Cherniak is counsel to and in affiliation with the International Trade Law and the Tax Law (Commodity Tax
