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Value Added Tax
The Value of Value-Added Tax Wayland Baptist University 3 May 2012 The Value of the Value-Added Tax Introduction Americans seem to fear taxes, but consistently complain about the economic instability of this country. A great deal of Americans does not even understand how to calculate the collection of, or expenditures of the percentage of taxes they pay on an annual basis. Other countries have adopted the value-added tax and are not in a massive hole of debt such as the United States. Is there value to the value-added tax? As history has indicated for hundreds of years, taxes are required for a country to face economic growth and to become prosperous. The income tax plan that is currently in place is not helping the United States economy in the least especially compared to our expenditures. But exactly which tax method would be of greatest value for the United States’ to begin the slow hike uphill to conquer the massive hole of debt. Is the income tax or consumption based tax best for Americans? This research paper may not answer the United States economic problems, but will define the various taxes and how they may benefit American’s current economic instability. Literature Review Mr. James R. White is the Director of Strategic Issues within the United States Government Accountability Office. The following article was in his testimony before the Committee on Ways and Means, House of Representatives, “Value-Added Taxes: Potential Lessons for the United States from Other Countries’ Experiences.” (White, 2011) Mr. White defined value-added tax (VAT) as a tax in which it is applied to the difference between the business’s sales of goods and services and its purchases of goods and services. In other words, the businesses pay taxes on what they add to their goods and services to their

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