The Discrete Charm of the VAT

Abstract:     
This paper examines the claims commonly made for the superiority of a value-added tax over other common forms of consumption tax - usually a wholesale or manufacturers sales tax, or a retail sales tax (of the kind seen in many States of the USA). The paper questions whether the VAT deserves its esteemed position in light of the particular difficulties it introduces for taxpayers and administrators compared to these alternatives, and the unlikely ability of the tax to match of some of the claims to superiority made for it by some of its supporters.

Number of Pages in PDF File: 32

Keywords: value-added taxation, consumption tax

JEL Classification: K34, H24, H25

Accepted Paper Series