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VAT required to balance the budget. | July 27, 2010

http://www.taxfoundation.org/blog/show/26553.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TaxPolicyBlog+(Tax+Foundation+-+Tax+Foundation%27s+%22Tax+Policy+Blog%22)

July 27, 2010

What VAT Rate Would Be Needed To Erase Obama’s Deficits?

by Scott A. Hodge

Because a Value Added Tax (VAT) has been floated as a solution to the government’s budget problems, we did a back of the envelope estimate of the VAT rates that would be needed to raise enough money to cut Obama’s deficits to zero. Assuming a VAT base of 41 percent of GDP (the average of European-style VAT, we would need a 22 percent VAT in 2011 to close the $1.4 trillion deficit.


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I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

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