No. of Recommendations: 5
VAT is immensely and unneedfully complicated compared to a simple sales tax like US states & cities have.
The benefit (to the government) is that the VAT is invisible to the end purchaser, so they don't really realize that they are paying a HUGE tax.
This tripped up some Aussie friends who were visiting us in the US. They grumbled that when they went to purchase a $9.00 item the cashier told them they had to pay $9.54.
They had to have sales tax explained to them.
That tax was readily visible.
Whereas the same item would have been priced at $11 with VAT, but the 25% tax was buried in the price and thus hidden from view.
There is no Federal sales tax, only state & local sales tax. If the US implemented a VAT, either the states & cities would be cut out and get no tax, or (most likely) people would be paying 25% VAT and 6%-10% sales tax.
To the extent that the government followed the US Constitution (ha!) it would require a new Amendment to allow a Federal VAT. That will never happen.
Non-US Citizens have a hard time grasping the US government structure. Most (all?) other countries the central government is the all-powerful one and the local ones have not much power.
The US is *really* what it says: a set of sovereign states, united. The states are jealous of their sovereignty, and there is no way that three-fourths of the States would ratify such an amendment.
