Under a pure national retail sales tax, all consumption expenditures by individuals and by federal, state, and local government agencies would be subject to the...
Advocates of the national retail sales tax claim that tax avoidance and outright evasion would decline, and that tax revenue collected from the underground economy...
Overview Constructed as a flat-rate consumption tax with a universal demogrant (cash payment) for needy families, the proposed national retail sales tax contains many of...
Many countries have attempted to implement national retail sales taxes or variants, such as wholesale-level taxes or “ring” taxes (retail sales taxes with exemptions for...
The President’s Advisory Panel on Tax Reform’s first objection to replacing the current tax system with a national retail sales tax hinges on the latter’s...
“Value-added” is the difference between business sales and purchase of goods and services from other businesses. It represents the sum of wages, other labor compensation...
Credit-Invoice Method Most countries with a value-added tax (VAT) employ the credit-invoice method. All sales by businesses are taxable, but sellers pass on invoices to...
In principle, the net tax base of a value-added tax (VAT) is all consumption. Most VAT systems, however, exclude certain items from taxation. Some items...
Zero rating Almost all countries apply preferential rates to some goods and services, making them either “zero rated” or “exempt.” For a “zero-rated good,” the...
Most countries exempt small businesses from a value-added tax (VAT)—partly because small business is a powerful political constituency and partly because the administrative and compliance...
If the value-added tax (VAT) replicates the effect of a well-functioning sales tax, why not just enact a retail sales tax? Retail sales taxes suffer...
The Hall-Rabushka flat tax would replace the current income tax system with a consumption tax. Their system is a two-part value-added tax (VAT). All value...
Value-added taxes (VATs) typically have a standard rate that applies to most goods and services. In 2016, the standard rate in the OECD averaged 16.7...
Critics provide various reasons a value-added tax (VAT) would enlarge government. First, they say that any increase in government revenues will lead to more spending...
A national retail sales tax would create a wedge between the prices paid by final consumers and amount received by sellers. Theory and evidence suggests...
Income inequality has increased sharply over the past 40 years. A simple way to measure inequality is by looking at the share of income received by the highest-income people...
