So I'm not that knowledgable of how taxes are paid and such in the US. However I was watching a politics show about why Canada is doing so well during a recession and why when compared to the US our debt per capita is punny. On the show a Canadian Politician stated that  Canada has a VAT tax via GST that the United States does not.

He then said that if the United States adopted a 5%-7% GST (Goods and Services Tax) on all goods and services like Canada does. He said the US could be out of debt within a few years. He said then the tax could either be cancelled or like Canada it could be used to offset losses and keep the country profitable.

Now obviously he stated Obama and members of the US Government have talked about a possible VAT tax, but apparently their were mass protests and petitions and such which made the idea un-appealing to the American Government. But if this tax was added on the trillions it would net would be more then enough to pull the US out of its debt crisis and keep the Government in surplus for years.

Now some would say that American's get taxed enough by their states. But honestly I go to Washington every once in awhile and shit down in Bellingham and Seattle is dirt cheap. Barely any tax at all, if they had a 5% VAT tax or such it would still be way cheaper then in Canada. Not only would it still be cheaper it would benefit the US economy and then with that money the Government could offer more services and improve the country.

So being from a country with a VAT tax I find it hard to understand why American's are so much against such a tax, especially when it could save their country from financial ruin as well as help the unemployed and grow the struggling economy.

So if your not American does your country have a VAT tax and has it been helping your Government and country, if your American are you for or against a VAT tax and why?

I live in the U.K where we have 3 VAT rates: 0% (food, children's clothing, plants), 5% (some utilities, solar panels, insulation) and 20% (everything else). Our country only introduced VAT at 6% in 1973, something to do with EEC membership. Since then it has been creeping up over time, from 6% to 8%, to 15%, to 17.5%, then back down to 15% for a year, back to 17.5% and recently to 20%.

In many ways VAT is good tax as unlike direct taxation it does not in a way de-inventivise working and earning money. This is one of the reasons why indirect taxes like VAT and fuel duty are favoured by many, most notably here in the U.K by the Thatcher government (in her 11 year premiership she reduced the top rate of income tax from 85% to 40% and the basic rate from 33% to 25%, but at the same time increased VAT from 8% to 15%).

The problem with VAT is that it often is regressive, it hits those on lower incomes hardest as a proportion of one's income. However, this can be limited via having necessities such as food and utilities at reduced rates of VAT. Another downside of VAT is the fact that any rises will contribute to inflation for a year after they are introduced. It is estimated that January's 2.5% VAT rise contributes to roughly 1.5% of the U.K's 4.2% inflation at the moment. This is alongside an effect of potentially damaging growth. Contrast this to direct taxes such as income tax, although also damaging to growth, but where a rise can help restrain inflation and an economy's balance of payments deficit.

Easy said than done. For one, the implementation of this tax will be costly especially for a fragile economy like America's.

I'm amazed that they don't have one already. It doesn't even have to be that high - a 10-15% VAT would really help them out.

We do have states with sales tax, fellas. Some as high as 10.25%. In fact, only 5 out of the 50 don't. Plus we tend to have county and city sales taxes on top of that.

State taxes is not a VAT tax. We here in Canada have always had provincial taxes sometimes up to 10% in the past as well. The VAT is on top of that its a country federal tax which funds the federal Government. Each State having a tax doesn't mean that a VAT tax isn't needed. Now I understand in area's with 10% state tax you'd be reluctant to have another tax added onto that. However desperate times call for desperate measures the US Gov is drowning in debt and such a tax could save your country.

Everyone hates taxes, but nobody can deny that the GST in Canada and VAT taxes in other countries has helped those countries through this recession where the US has been hit really bad. Just look at how well Canada did or many of the other VAT tax countries, sure some didn't fair that well but the tax has helped many of our countries immensley.

The US could really use a federal VAT tax!

Yea. I think with all of these tax talks people forget that while we have federal taxes, we also have state taxes. In CA we have a sales tax already, another income tax i believe (in addition to the federal) a tax on gas. A higher tax on cigaretts. Not too mention any county taxes and than city taxes. Sounds like its time for another tea party.

we do not have a revenue problem. We have a problem of the government overspending and not living with in its means. Our tax code has become a joke with too many loopholes. The solution to that is not too add more taxes on top of that, its to fix the tax code to close loop holes and make sure people pay their fair share, and to to fix our over spending. I would be for a vat tax if we are going to remove all other taxes and have a three tiered vat tax (essential items no tax, general items a low tax, and luxury items a high tax).

We should focus on cutting spending instead of raising taxes

I would replace the corporate tax with a corporate vat. That way we tax all companies who do business here, rather then just the ones who are nice enough to locate here and create jobs here.