Should You Be Getting Ready for a National Sales Tax?

According to a tax attorney, we could be facing a national sales tax.

According to tax attorney Jeremy Scott, who is also the vice president of editorial at the publisher Tax Analysts, “A more likely solution is a national consumption tax, otherwise known as a value-added tax, or VAT. A 5% VAT would raise an enormous amount of money.”

Scott is referring to the national debt problem and how the Republicans may try to reduce annual deficits.

“You’d phase it in slowly, and only do it once you’re sure you’re out of the recession,” remarked Scott.

A national sales tax could raise prices and reduce growth but a VAT is instead assessed at various stages of production. This allows producers to bear the cost and consumers aren’t faced with rising prices.

The good news is that the economy is doing well right now so this could be something that only potentially happens well of into the future.

It was last year that the House Republicans had proposed a tax similar to a VAT but President Trump had said it was too complicated and it was dropped.