VAT tax and trade

By Dennis Kruse, Cresco

The value added tax is just a scheme to help domestic manufacturers complete in global markets. 

The way it works is you lower the taxes you should otherwise collect. Then you put on a VAT tax, you collect it on everything sold in your country, including imports, and say that you are just treating foreign and domestic goods the same. Are we that easily fooled?

Then besides this, most VAT tax countries refund back to exporters the VAT tax.

Bottom line, U.S. exports to a VAT tax country get charged around 20 percent more than they otherwise should, and their goods sold in the U.S. get charged 20 percent less than they otherwise should. 

Under VAT tax rational, the U.S. could refund all the taxes they now collect. Then get it back by putting on a VAT tax, but now they would be able to spread that cost out onto everything sold in the U.S., including imports.

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