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US VAT dead for 10 years?

  • May 3, 2016 | Richard Asquith

US VAT dead for 10 years?

Does the news from the US this morning means no VAT in the US for at least 10 years?

Presidential candidate, Ted Cruz, has dropped out of the US Republican Nomination race. He was the only remaining candidate to be seriously proposing a VAT-like tax for the US. Although his version was not as close to the EU / OECD model as his opponents tried to paint it.

But it does seem likely that the US will remain isolated amongst over 150 countries in not having Value Added Tax. Neither of the remaining major candidates appear interested in VAT, which means a wait for at least five (US presidential term is 4 years + time for chance to implement) years, perhaps ten years for the next proposal.

In the US on the right / Republican side, VAT is viewed being too easy for big government to raise money and expand its activities.  On the left / Democratic wing, it is seen as regressive, falling disproportionately on the less well-off.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara