Pat Choate, “VAT and the Great Tax Swap,” Huffington Post, 04/26/10

“Beyond simplicity and ease of compliance, a VAT is compatible with global trade rules while the present U.S. tax system is not.  This is of immense importance.   Under the rules of the World Trade Agreement, nations that use a VAT can rebate those taxes on exports and impose an equivalent amount on imports.  Thus, other nations are able to subsidize their exports sold in the United States, while imposing a tariff-like VAT on U.S. imports into their countries.        

In 2007, the 153 other nations with a VAT provided $230 billion in rebates for goods exported to the U.S., and imposed $125 billion of import taxes on U.S. made goods sold in their countries.  Their products got a VAT-created competitive advantage here and there.  Changing the U.S. tax system from one based on corporate and personal incomes taxes to one based on a VAT is a unilateral way for the U.S. to eliminate this discriminatory foreign tax treatment.  

The longer we delay making this great tax swap the more jobs we will lose and the more it will cost us to keep our corrupt, inefficient and flawed approach to taxes.”