Dobbs, Lou, “War on the Middle Class,” Viking, New York, NY, 2006

(VATinfo Note: Dobbs does not mention VAT in his book, but he did tell the publisher of this site that he could support replacing other taxes with a VAT.)
“Fifty years ago, corporate income taxes made up a third of all federal revenues; now corporations account for just an eighth.  Income taxes from middle-class working families, in contrast, contribute roughly half of all tax revenue collected by the federal government.  In 2004, when Congress approved billions in corporate tax cuts, a report by Citizens for Tax Justice showed that the United States’s biggest and most profitable companies had been paying decreasing federal income taxes over the previous three years–despite reporting higher profits  Many of them were paying no taxes at all.  The CTJ study found that the average effective tax rate for the largest 275 American corporations had dropped by a fifth over those three years, from 21.4 percent in 2001 to 17.2 percent in 2003.  These 275 companies reported pretax profits from U.S. operations of almost $1.1 trillion in that three-year period, yet they paid taxes on only $557 billion.  That rate is around half of the statutory 35 percent corporate tax rate that companies are obligated to pay to the U.S. government,” p. 30.

Seidman, Laurence S., “Pouring Liberal Wine into Conservative Bottles. Strategy and Policies,” University Press of America, Lanham, Maryland, 2006

“With the retirement and greater longevigty of the baby boomers looming on the horizon, and the corresponding projected rise in the percentage of GDP that will be absorbed, even with fiscal discipline, by Medicare, Medicaid, and Social Security, it will be difficult to reduce large projected budget deficits without substantial additional tax revenue.”
“…(R)ather than rely solely on the current arsenal of taxes to raise the revenue, it would be better to put some of the burden on a new PVAT (Progressive Value-Added Tax),” p.113

Greenstein, Robert and Peter Orszag, “A Broken Federal Fiscal Policy…and How to Fix It,” in “What We Stand For, A Program for Progressive Patriotism, Mark Green, Editor, The New Democracy Project, New York, NY 2004

“(To raise revenues) another possibility is to introduce a value-added tax [VAT] in the United States to help reduce long-term budget deficits.  Most developed nations and all members of the European Union impose a VAT.  A broad-based VAT [one that excludes only small businesses, education, religion, and health cafe) would generate revenue equal to about one-half of 1 percent of GDP for each 1 percentage point of the tax.  By itself, a VAT would be regressive, so it would need to be accompanied by other tax-code changes to maintain the overall progressivity of the code,” p.84

Tonelson, Alan, “The Race to the Bottom, Why a Worldwide Worker Surplus and Uncontrolled Free Trade Are Sinking American Living Standards,” Westview Press, Cambridge, MA 2002

“Tariffs, however, are not the only charge imposed on imports (in China).  Value-added taxes have been routinely imposed as well — and they have been based on the products’ cost includng their tariffs and any consumption taxes to which they are subject, not on their pre-tariff prtce.  After China signed its WTO agreement with the United States, a Chinese automotive industry official announced that its remaining trade barriers would still keep Chinese auto costs four times world levels,” p. 73

Aaron, Henry J., and William G. Gale, “Fundamental Tax Reform: Miracle or Mirage?,” in “Setting National Priorities, Budget Choices for the Next Century,” Ed. by Robert D. Reischauer, The Brookings Institution, 1997

“The value-added tax is a well-established revenue instrument…but all (nations) have used the value-added tax to supplement the personal and corporation income taxes — not to replace them.  They have, therefore been able to use their income tax systems (as well as extensive spending on social services and cash transfers) to achieve distributional equity.  When the claims of tax reform advocates have been subjected to the scrutiny that serious consideration of a live legislative proposal inevitably evokes, Congress and the American public may well conclude that the personal and corporation income taxes, reviled and despised as they are, should be remodeled and reformed rather than replaced,” p. 260

Gibbons, Hon. Sam, testimony (06/08/95) in Hearings before Committee on Ways and Means, publ. in “Replacing the Federal Income Tax,” USGPO, 1996

“The current income tax is an impediment to maximum competitiveness of American companies in international markets.  The income tax simply has not kept up with the many changes that have occurred in the global marketplace.  The current system penalizes exports because under General Agreement on Tariffs and Trade GATT), only indirect taxes, such as a VAT, can be adjusted at the border.  Income taxes cannot be removed from the price of goods when they cross the border to be exported.  I believe that a border-adjustable tax system would promote the competitiveness of American companies and invigorate American exports,” p. 467

Thurow, Lester C., “The Future of Capitalism, How Today’s Economic Forces Shape Tomorrow’s World,” William Morrow and Company, 1996

“There is no question that America’s tax and expenditures systems are biased in favor of consumption.  Savings are taxed as income, many forms of consumption such as health care are untaxed, and other forms of consumption such as housing are given large tax breaks.  Legislators love talking about changing the system to reward saving and investment.  Tax cuts are often justified as incentives to save — but in reality they seldom are.  Just lowering taxes, as was done under the Reagan administration, for example, simply left people with more after-tax income to spend on consumption — which is what they did and savings rates actually went down.  If more savings are desired, the right technique is not tax breaks for income but tax penalties on consumption that rise as consumption rises.  Yet serious legislation to shift from a system of taxes on income to a system of progressive consumption taxes is conspicuous by its absence,” p. 301-302

Pollack, Sheldon D., “The Failure of U.S. Tax Policy, Revenue and Politics,” The Pennsylvania State University Press, University Park, PA, 1996

“One other defining characteristic of the business component of the flat tax is that it is an ‘origin-based’ tax.  This means that the tax applies to any business located in the United States — whether conducted through a corporation, partnership, or sole proprietorship.  Under an origin-based tax, a domestic business pays tax on all of its goods produced (whether for domestic use or export), while imported goods are exempt from tax.  This is in contrast with most VATs based on the European model, which is ‘destination-based.’

Under a destination-based VAT, imported goods are subject to tax while exported goods are exempt (‘zero-rated’).  To implement these principles, tax is imposed at the border on imported goods, and in the case of exports either a border adjustment (tax rebate) is provided or in the case of a ‘credit-invoice’ VAT, the exporter is allowed a refundable credit (to offset the VAT paid on the goods purchased by the exporter).  These border adjustments are consistent with the General Agreement on Tariffs and Trade (GATT), to which the United States recenly became a signatory party.

On the other hand, rebating the flat tax on exports (as well as allowing a deduction for wages) would not be allowed under GATT rules.  That the flat tax is an origin-based consumption tax has been widely criticized as an apparent impediment to U.S. businesses exporting their goods.  Because of the border-adjustments, a destination-based VAT appears to subsidize exports and create a protective barrier from imports, while an origin-based tax appears to put domestic producers at a relative disadvantage compared to foreign producers.  But economists argue that it really makes no difference.  In the case of an origin-based tax such as the flat tax, there will be a corresponding adjustment in currency rates and/or rates that in the long run will correct for the absence of border adjustments, p. 275

Slemrod, Joel, and Jon Bakija, “Taxing Ourselves, A Citizen’s Guide to the Great Debate Over Tax Reform,” The MIT Press, 1996

“The introduction of a large VAT could allow us to reduce both personal and corporate income tax rates substantially, and perhaps even exempt most people form personal income taxation altogether.  Note, however, that it would not be a good idea to simply replace our corporate income tax with a VAT while retaining a personal income tax.  As noted earlier, the corporate income tax is an important ‘backstop’ to the personal income tax for taxing capital income.  Replacing it entirely with a VAT would create many inefficient and complicating avoidance opportunities involving the sheltering of personal income in businesses,” p. 248

Luttwak, Edward N., “The Endangered American Dream,” Simon & Schuster, New York, NY, 1993

“…(V)alue-added taxes would directly attack the central problem of the US economy: overconsumption, which arithmetically results in undersaving, which almost arithmetically results in underinvestment, which absolutely results in the undercapitalization research and development, public infrastructures, and private plant and equipment,” p. 295