The biggest advantage of a VAT is that it can be rebated on foreign sales without violating the WTO rules. The US dollar is currently quite weak because of trade deficits (we buy more abroad than we sell abroad). If we adopted VAT, we could sell more abroad because foreign sales would not be subject to the VAT.
"The biggest advantage of a VAT is that it can be rebated on foreign sales without violating the WTO rules. The US dollar is currently quite weak because of trade deficits (we buy more abroad than we sell abroad). If we adopted VAT, we could sell more abroad because foreign sales would not be subject to the VAT."
-- A National Retail Sales TAx (NRST) would do the same thing. In fact, prices of exported goods would be even lower due to lower tax compliance costs. The VAT has HUGE compliance costs.