ADIL SAYEED (@adilsayeed): "Yes, introducing VAT raises price level, but Canadian (1991) and Australian (2000) experiences replacing wholesale taxes with VATs shows little or no lasting effects on inflation beyond one-time price adjustment. But, for sure, in current US political environment, moving to VAT …"

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Yes, introducing VAT raises price level, but Canadian (1991) and Australian (2000) experiences replacing wholesale taxes with VATs shows little or no lasting effects on inflation beyond one-time price adjustment. But, for sure, in current US political environment, moving to VAT seems further away than humans on Mars.

US already has a form of wealth tax in estate tax. Rise in exemption to $15 million makes it ineffective plus relatively easy to avoid. But, South Korea's estate tax works with recent $8 billion payment by Samsung estate.

Jared Bernstein

May 6

I co-authored a piece coming out soon in Democracy Journal (w Andrea Campbell) on this very point. A progressive VAT is doable and possibly would have more popular support than other options (low/mod income VAT payers get rebates at point-of-sale!). One problem right now, however, is that VATs, like tariffs, tend to raise prices.

May 6

2:50 PM

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