VAT Watch, ctd
Here’s some arguments against a VAT that focuses on some of the transitional problems and explains why it may end up more complicated then policy reformers hope.
Like, the U.K. when it adopted its VAT in 1973, the U.S. will struggle for at least two years and probably longer to implement a VAT. Hundreds of thousands of small businesses would have to register with the IRS and have their sales and remittances monitored. The IRS would have to hire tens of thousands more agents. Exemptions will alleviate some of that problem, but a VAT exemption still hits those businesses with the tax. The income tax looks bad now, but wait until you see this.
I still think the benefits outweigh the costs, but the concerns are real. If someone has a better idea for a more efficient and simpler tax I’d be happy to support that.
(via Marginal Revolution)