Income Tax Updates

At least 139 countries, including most major countries except the United States, to levy value added tax on goods and services.

But as the U.S. facesswelling deficit talk about taking one became more widespread and is likely to increase. Recent rumblings came in early this month at the commission meeting, the White House looks for ways to dig the U.S. out of its financial hole.


Responding to questions from Commission members, whether corporate leaders could live with what is known as VAT, Business Roundtable officials said they believe the idea, but only when Congress decided to streamline and reduce the U.S. corporate income tax.

"We certainly think, like everything else, [VAT] is something that should be considered, but considered in the context ... in the overall structure of our tax system," John Castellani, president of the Business Roundtable, which includes U.S. leaders of multinational companies, showed at the hearing.

VAT, sales tax, which was first adopted in France in 1950. It seems like a retail sales tax, but usually collected together the production process, business and obtain credit on the VAT they pay more. Automaker, for example, will collect tax from customers on all the cars he sells, but get a credit on the VAT it paid on tires and other parts bought it to vehicles. Automaker will pay the difference in government.

Advocates say VAT creates less incentive to avoid over sales tax, while limiting the economic damage, compared with income tax. But conservative critics fear that it's just another crane for the government would use. And many business owners treat it with caution, partly because of its administrative complexity.

Two months ago, after the pro-VAT remarks of some prominent figures, including House Speaker Nancy Pelosi, the U.S. Senate voted 85-13 to condemn the VAT as a "significant increase in tax.

But the talk of VAT remain in Washington as political leaders face the challenge of soaring deficits of the country under control.Read More

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