The TaxProf Blog reports on an article in the Wall Street Journal that labels some Republican tax plans as a “Value-Added Tax”. Apparently the “business flat tax” or “business activity tax” are considered Value-Added Taxes, which I believe is incorrect. Of course there is no set definition of a VAT or GST, at least not as the rest of the world know it.
The WSJ then continues to state that
“Almost every country in the world uses a VAT, imposing a tax on middle-class consumers and workers to fund benefits such as parental leave and health insurance.”
which I believe is a rather narrow statement as well. In itself, most VAT systems are regressive, which means in this framework that the tax burden is on the lower income brackets rather than the higher, even though this effect may be neutralized by way of other tax or non-tax subsidies.
Have a look at the article here: