Word: vat
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
...hottest economic debates this election year crackles round a measure that President Nixon has been conspicuously flirting with but has not yet openly embraced: the value-added tax. A kind of national sales tax that is imposed on most goods and services, VAT is a big revenue raiser in Europe. West Germany, for example, collects 25% of its government's money from it. By adopting VAT, the U.S. could ease its crushing problem of raising funds for urgent social needs from a revenue base that has been steadily diminished by income tax cuts...
...moment, President Nixon has not formally proposed VAT because he is aware that any new tax would meet hard opposition from Congress and from voters, who are already up in arms over the tax load. Treasury Secretary John Connally has said that the Administration has no plans to recommend any new taxes this year. Yet VAT has been under serious consideration for months, and White House aides have been floating the idea in what amounts to a test-marketing program among Congressmen and state and local officials. The possibility that a form of VAT will be imposed at some future...
Incendiary Issue. Seeking to break out of the fiscal straitjacket, Nixon is seriously studying a "value-added tax," which he may propose to Congress as early as March. A kind of national sales tax, the VAT would collect a percentage of the cost that is added to a product as it moves from raw-material supplier to manufacturer to wholesaler to retailer. For example, when a furniture maker sold a carload of chairs, he would pay to the Federal Government perhaps 3% of the difference between the raw-material cost and the selling price of the product. This would...
Most of the VAT receipts, which it is estimated would reach between $10 billion and $12 billion a year, would go to municipalities to pare education costs. This would ease the burden on homeowners, who pay for schools out of their increasingly heavy property taxes. Because the money would be distributed on a per-pupil basis instead of by school district, the plan would enable Nixon to redeem his pledge to aid parochial schools...
...VAT has some drawbacks. A study by Otto Eckstein's Data Resources Inc. notes that it would slow the economic recovery by slightly increasing prices. This would crimp sales and production and thus retard a return to full employment. The study estimates that with the VAT the jobless rate at the end of 1973 would be an estimated 5%, v. 4.8% without it. The VAT will meet determined opposition in Congress. Democrats and labor chiefs see it as another regressive levy that adds unfairly to the burden of the poor and the lower middle class. But whatever happens...