I will pay for the following essay Public Finance-The Value-Added Tax: Is It Good for the United States. The essay is to be 6 pages with three to five sources, with in-text citations and a reference p

I will pay for the following essay Public Finance-The Value-Added Tax: Is It Good for the United States. The essay is to be 6 pages with three to five sources, with in-text citations and a reference page.

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The structure of VAT varies from country to country therefore, in the initial years, VAT could not be imposed throughout the European Commission because of lack of uniformity however, and in 1977 a consistent rules for VAT in European Community (Kearney). Until 1988, value-added tax became a tax revenue instrument for 50 countries of the world and it was contributing to 5.1 percent of their Gross Domestic Product (Hassan and Zeljko). In 2006, 136 countries have implemented VAT including the OECD member companies except the United States and in these economies it contributes to one-fifth of their total tax revenues (OECD). Around 70% of the world’s population is residing in the countries where value-added tax has been imposed (Kardar). Until June 2010, 150 economies of the world have adopted VAT which has significant uniformity however. VAT of Japan is different (OECD). In the context of trade liberalization, VAT was recognized as a preferred alternative as compared to customer duties because of its neutrality of principle towards international trade (OECD). VAT works by charging the tax at every stage of supply as an output tax and it can be deducted as an input tax by businesses and the businesses passes on to the government the difference between the output and input tax. All companies that sell to the final consumers or other businesses remit VAT and it is calculated by multiplying the gross revenues by VAT rate which varies from country to country and then taking a credit for VAT that has been already paid to suppliers (Fox). VAT is different from sales tax because it is levied on goods and services whereas sales tax is charged on goods. Moreover, it is a multistage but single point tax and it does not have cascading effect like sales tax (FBR Gov). Therefore, VAT appears to be a general tax on consumption that is collected at different stages of production of the products or services and it is passed on to the consumers. Moreover, the revenue collected through VAT is the tax revenue of the government. Since United States is the only OECD member state which has not adopted VAT, therefore, in this report, the merits of imposing VAT in the United States have been discussed. Pros and cons of imposing VAT Around 150 world economies have imposed VAT because of the simplicity, neutrality and lack of visibility of this system. There are various other advantages and disadvantages of adopting VAT in an economy. Value-added tax has been accepted as a source of revenue because it has the ability to raise more revenues as compared to sales/turnover tax and on theoretical grounds value-added tax is a neutral tax which eliminates tax on tax and also enables a zero rating of exports (Kardar). The neutrality of VAT is considered important because in public finance, the more neutral is the tax, the less is the influence on the private economic decisions and more efficient is the economy (Bickley). The research study of Hassan and Zeljko found that VAT produces more revenues in the countries with single VAT rate as compared to the countries with multiple VAT rates. Toder has identified four pros of VAT including international compatibility, exemption of small businesses, reduction of burden on capital income and self-enforcement mechanisms. VAT is considered to be more vulnerable to high profile criminal attacks for example.

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