Is a VAT needed for America?

[mileslunn]

Hell yes.  US is the only industrialized country and one of the few in the world without a VAT.  With a $1 trillion deficit, there aren't enough spending cuts available and you cannot grow your way out of that when economy is running on all cylinders.  So you need to raise taxes somewhere and most economists say consumption taxes least harmful to growth, income taxes fall in between, while corporate taxes are most harmful. 

In Canada where I live, I've been pushing for us to raise our VAT (GST it's called) to 7-10% from its current 5%.  With a VAT, over time there is enough revenue for even bigger tax cuts if you are on the right or enough to fund many social programs left wants but are currently unaffordable.  Corporate taxes in US are similar to most of Europe, while income taxes a bit lower but the difference is not big enough to explain much weaker social safety net or much larger deficit.  The big difference is in Europe VATs are 20-25% so that is where they get the revenue to fund much larger welfare states, have smaller deficits, and still keep corporate and income taxes reasonably close.