Yes, it won't raise prices... because the price of the taxes is being taken out and replaced with the VAT.

Most american companies will be paying LESS in taxes with the burden shifting to those who import goods from other countries.

American made products would go down in price, foreign procuts would go up in price.  In genreal through everything would stay around the same price.

A Vat would save companies 100 billion dollars.  For compliance

If anything American made products in america would be a LOT cheaper.

Also, it wouldn't be 20%.   20% is if you replaced the ENTIRE tax code.

Including income tax and such.

To replace the coporate tax code, you'd probably need like 5%.

See here

"I have been recommending for the past year abolishing the corporate income tax to be replaced by a 5 percent VAT -- 2 percent to replace the corporate income tax; 1 percent to pay for health care reform; and 2 percent to pay down deficits. Having served in the U. S. Senate 38 years and on its Budget Committee over 30 years, I know this is realistic and doable by Congress."

http://www.postandcourier.com/news/2010/apr/29/use-vat-to-replace-corporate-income-tax/

(He's an ex democrat senator by the way.)

Heck, it'd only be a 2% tax increase if we leave the healthcare reform and deficists as they are and just want to replace it.

Not counting the savings from not having a corporate tax or needing corporate tax lawyers.

Another aricle by the same guy says

The 2010 estimate for corporate income tax is $156.7 billion, whereas a 5% value added tax raises $600 billion.  Food, health, heating and cooling, and rent can be exempted for the lower income which still leaves over $300 billion to pay down the debt. Corporate income tax begins today at 35% with an average payment of 27%. Reducing the tax burden on production of 27% to 5% lessens the cost of articles for domestic consumption and, with no tax on exports, makes it profitable to produce in the United States.

http://www.huffingtonpost.com/sen-ernest-frederick-hollings/what-went-wrong_b_781138.html

In Germany, VAT is 19% so actually very close to the 20% mentioned here. And VAT is just one of many, many taxes we have over here (we have about 60 different taxes). But of course that doesn't say anything about how high VAT would have to be in the USA, just wanted to mention it because the 20% are so close to what we have.

VAT isn't very popular over here, but I think that's mainly because most people are shortsighted. Every tax is unpopular, but VAT is a very apparent/obvious tax: Raise it, and everything will instantly get more expensive, everyone will feel the effects and people will cry. That's why polititians are afraid of raising the VAT - raising taxes that only affect part of the population is more unfair, but it will annoy less people.

But personally I think VAT is a good thing. I think it's a very fair tax and I would prefer massively raising the VAT in order to reduce or even better eliminate most of the other, more hidden taxes.

You guys also have things like universal healthcare, so i'd expect your taxes needing to be higher.

That's one of the things people argue against a VAT is that it goes up a lot in the europeon countries.  Your VAT starting off at I think 10%?

However it's an effect not a cause if you ask me.   The VAT goes up because the taxes need to go up to deal with the expanding government.

Not that the VAT expands the government.  I think, like you say... it's a much more transparent tax then most others.

Not to mention the kind of trade advantage a VAT can have.

Afterall I don't believe (correct me if i'm wrong) a German videogame manufactuerer who sells games in the US has to pay a VAT for their game or US taxes.

While a US company would have to pay BOTH the US tax rate (27%) and Germany's VAT (20%)

People actually need to work for themselves and have their own ideas and business.

Now you may say that is hard, but life is not easy task, even for many rich people at birth.

There's not enough public job offers for everyone and global population will continue to grow exponentially.

This may sound like racism, but in countries like Zimbabwe, Malawi, Belarus, China, India should be forbidden to have more than 2 children per couple.

In Africa there's homeless people with up to 10 children. They can't support themselves and they keep pumping out kids just to abandon them at a young age and let them starve. Those people can only have shit instead of a brain.

The biggest problem I see in the US economy is the type of economy we have.

It is very difficult to create jobs in a service economy when people cannot afford the "service" that is provided to them.

When you manufactor goods, those goods can be offset (price wise) in many ways by the government, to

A) Cost less

B)Thus sell more

C) Create higher revenue stream that will allow for more jobs...etc

Yes, it is much more complicated than that, but that is what I have always seen as the weakness of the US economy.

In what way can the government make goods cost less for an extended period of time without a proportionate increase in taxes, or a decrease in the value of their currency?

By making goods artificially less expensive wouldn't the government just be protecting less efficient or less competitive companies? In the long run how does this lack of competition help produce jobs?

VAT is a good way to encourage investment/savings and discourage consumer spending. I would hardly feel bad about it if retailers selling big screen TVs suddenly miss their profit forecasts because of it.