What if Congress lowers income tax rates and imposes a consumption tax--perhaps a national sales or value added tax--to make up the difference?
In the end, Bruce makes a case for phasing in a well-designed Value-Added Tax, both to help reduce the deficit and in the name of economic efficiency.
It may be a broad-based levy such as a Value-Added Tax or an energy tax.
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There often is debate about whether, if we went the national consumption tax route, a value-added tax (VAT) or retail sales tax (RST) would be better.
The new policy is designed to boost income for the government (though the value isn't known yet) and create better jobs, especially high-tech manufacturing jobs that produce value-added tax revenue--not low-cost textiles.
We could repeal the corporate tax entirely and enact a Value-Added Tax.
He was recently criticised during a televised debate by Minnesota Congresswoman Michele Bachmann, who said the sales tax would eventually become a national value-added tax.
The tax hikes include a rise in the value-added tax and a (risk-adjusted) levy on bank profits.
An existing 16.5% tax on wholesale transactions is to become a value-added tax at a slightly lower rate, though existing exemptions will survive (a mistake, say some economists).
It also cut social-security contributions, partly making up the shortfall with higher value-added tax.
Second, the law was introduced as a counterweight to trade-enhancing measures in Europe, such as the rebate of value-added tax on exported goods.
Most recently, I criticized the Paris-based bureaucracy for making the rather remarkable assertion that a value-added tax would boost growth and employment.
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The government has further plans, among them a tax reform replacing state sales taxes with a national value-added tax, and a second, more radical reform of pensions.
At the beginning of 1994, with only a few weeks' notice, the authorities scrapped a 5% tax levied on foreign companies and introduced a 17% value-added tax instead.
So it was a dilemma for us: to reconstruct the old tax system, or to combine price liberalisation with a new value-added tax.
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Moreover, there appears to be another stratagem that exporters extensively used in December, the round-tripping of goods through special trade areas and bonded warehouses to earn substantial value-added-tax rebates.
Just when German consumers seem to have recovered their confidence, after years of low wage-growth and worries about jobs and pensions, the government wants to raise value-added tax by three percentage points next January.
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The manifesto confirms its ambitions on tax: for a lower 10p starting rate of income tax, for a cut from 8% to 5% in value-added tax on fuel, and for no increase in the 23p basic rate nor the 40p higher rate of income tax.
An alternative is a value-added tax, which all other OECD countries have (see article).
For their part, some states are challenging the equalising allocation of value-added tax revenues.
The only real way to pay for those benefits will be a value-added tax, or VAT.
Spain is reversing its fiscal stimulus by raising its main value-added tax rate next year.
Despite the fillip from the temporary reduction in value-added tax, consumer spending will fall sharply.
The many lawyers in Congress recently decided to exempt their profession from value-added tax.
For example, we could create a value-added tax, which every other rich country in the world has.
Italy's value-added tax rate on hotels and bars is 10%, compared with 7% in most European countries.
Previous price rises, caused by weaker sterling and an increase in value-added tax, continue to chill consumption.
Some sort of value-added or sales tax, by contrast, would be at once more effective and more incendiary.
Ms Salgado is already raising value-added tax, with the top rate going from 16% to 18% in July.
In replacing business taxes with a value-added tax, the government has eased the fiscal burden on small firms.
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