Letter from Chip Northrup
What's the True Value of a VAT?
Republican politicians have wanted to implement a national sales tax, in the guise of a value-added tax, or VAT, for decades. A VAT is the centerpiece of most tax regimes in Europe and in Asia, where it averages 10-15 percent.
By unilaterally imposing a higher tax on imports, Trump will effectively create a de facto VAT on many imported goods from our three largest trading partners—China, Canada and Mexico. The tariff is collected when the goods are imported into the U.S., but the cost of the tax is passed along from the importer to the distributor, to the retailer, to the consumer.
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