What are the Benefits and Drawbacks of a Value Added Tax (VAT)?
What are the Benefits and Drawbacks of a Value Added Tax (VAT)? A possible way to fund the largest deficit in U.S. history is a value added tax (VAT), also called a national sales tax. Here are some benefits and drawbacks of a VAT:Answer: Benefits of a VAT for the U.S. • A VAT would eliminate (so advocates assert) the labyrinthine U.S. income tax system, since the VAT is so much more efficient and would bring in more revenue. • A VAT would also solve the problem of lost online sales taxes, since the imposition of a VAT would mean that all sales, even online sales, would be taxed. • A VAT would provide additional income to reduce the deficit and fund critical programs like health care for every American. VAT Drawbacks/Problems: • VAT’s are hugely regressive, with the cost falling mostly on the poor. • It will be difficult, if not imposs
