Value-Added Tax: A New U.S. Revenue Source? (CRS Report for Congress)
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| Release Date |
Revised Jan. 3, 2008 |
| Report Number |
RL33619 |
| Report Type |
Report |
| Authors |
James M. Bickley, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
In the 110th Congress, some Members of Congress are expressinginterest in examining the feasibility of levying some form of a value-added tax as away to reform the tax code or finance national health care. Representative Burgessintroduced H.R. 1040, which would allow taxpayers to select a flat tax, a modifiedVAT based on the concepts of Robert E. Hall and Alvin Rabushka, as an alternativeto the current income tax system. Representative Phil English's proposal (H.R.4159) would replace our corporate income tax with a subtraction-method VAT andour individual income tax with a consumed-income tax. Senator Richard C. Shelby'sproposal (S. 1040) and Senator Arlen Specter's proposal (S. 1081) would replaceindividual and corporate income taxes and estate and gift taxes with a flat tax basedon the Hall-Rabushka concept. In addition, in the 110th Congress, RepresentativeJohn Dingell introduced H.R. 15, which would levy a VAT to finance national healthinsurance. Furthermore, some advocates of a VAT argue that this tax is needed tomeet the long-term revenue requirements of the federal government.
