Would remedy our global trade disadvantage
There is another reason for considering the value-added tax (VAT) [“National sales tax idea getting fresh look,” page one, May 28]: It would make us more competitive in the global marketplace.
At present, under World Trade Organization rules, our trading partners, who rely principally on the VAT, can exempt their exports from the VAT and charge a “border tax” equivalent to the VAT on imports. Since the average VAT is about 20 percent, this puts us at a great disadvantage.
The VAT could be made less regressive by giving to everyone a tax rebate that would be equivalent to what those in poverty would pay. It would have the added benefit of eliminating the underground economy, which accounts for many billions in taxes that are evaded. It would also largely eliminate the IRS from most people’s lives, since the VAT is collected from businesses.
— Edward Golden, Everett