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THE ISSUE
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The VAT was initially started as a post-World War II trade agreement to help rebuild Europe. Today Europe is thriving- the European Union had a greater GDP than the United States in 2007. But instead of VAT disappearing, it is now used by 149 countries worldwide.
VAT destroys America’s ability to produce and compete in the world market by promoting an un-level playing-field for global trade. The VAT tax acts a de facto subsidy for exports entering the American market, and a tariff against imported American goods.
Foreign governments collected $122.4 billion from U.S. producers in 2006; foreign producers collected $218.2 billion in rebates during that same year.
In 2005, the tax was applied to 94% of U.S. imports and exports. In EU countries alone in 2001, the Average VAT rate applied was 19.4%, coupled with a tariff average of 4.4% levies a total tax of 23.8% on American goods and services.
EIC POSITION
“The Value Added Tax (VAT) has placed the U.S. at an unfair disadvantage in global trade.
It must be immediately amended. It acts as a de facto tariff against U.S. exports and a subsidy for foreign goods entering American markets. With failed VAT policies in place, American companies can not compete.”
WHAT YOU CAN DO RIGHT NOW
• Tell the presidential candidates that a tit-for-tat policy for trade should be implemented to counteract the destructive effects of the VAT on American producers.
• Write a letter to your congressional representative and demand that the VAT tax be amended.
• Write your U.S. Representative to support H.R. 2600 The Border Tax Equity Act. This bill levels the playing field for American exporters against the discriminatory effect of the VAT by creating a tit-for-tat system of trade.
• Let others know about the Vat Tax, download our informative document.
• Join a discussion group via Meetup.com to find people in your area to talk about this and other issues with.
REFERENCES
Information on H.R. 2600: Border Tax Equity Act of 2007 7/22/2008
2008 Agenda – American Manufacturing Trade Action Coalition 7/22/2008
Border Adjustable Taxes- Coalition for a Prosperous America 7/22/2008
Problem- The VAT Disadvantage- The National Textile Association 7/22/2008
Vat Tax- Wikipedi 7/22/2008
Order the Book "Dangerous Business: The Risks of Globalization for America" by Pat Choate.
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LIST OF RELATED ARTICLES
Friday, October 23, 2009
 International trade is inherently unfair if everyone plays the game by a different set of rules.
Thursday, October 08, 2009
Pelosi said that not only would a VAT help pay for health care reform, but it would also greatly improve the competitiveness of American businesses.
Saturday, October 03, 2009
The VAT would raise the necessary revenues to bring the budget under control. It would also encourage savings and level the playing field with America’s trading partners.
Tuesday, September 01, 2009
The United States needs to adopt an entirely new tax system that allows the country to be competitive in global markets.
Friday, July 10, 2009
Instilling our own VAT system would be a simple and effective method for raising revenue domestically to keep our indebted government operational and lower our dependence on foreign funding.
Friday, June 05, 2009
A VAT would help close federal budget deficits... and would help tax those who presently escape paying their "fair share" of personal taxes.
Wednesday, June 03, 2009
In 2006, VAT nations collected rebates totaling $218.2 billion while the U.S. was forced to pay $122.4 billion in taxes due to the VAT.
Tuesday, June 02, 2009
There is no bigger trade problem than the VAT. Do the math.
Thursday, May 28, 2009
Whether you look at the VAT from the standpoint of a fair trade advocate or a fiscal conservative the conclusion is the same: America needs this or something like it.
Monday, April 20, 2009
Virtually all our trading partners charge a tax on U.S. exports to them. It is called a consumption tax, or a value added tax, or a border adjustable tax, or a goods and services tax.
Saturday, March 07, 2009
Our self defeating tax structure, compared to all of our foreign competing countries, places us in a most disadvantageous position. Foreign governments collected $122.4 billion from U.S. producers in 2006; foreign producers collected $218.2 billion in rebates during that same year. It prevents us from competing and must be immediately changed.
Sunday, January 04, 2009
The WTO allows countries using a VAT system to promote an unlevel playing field for global trade. The VAT acts as a de facto subsidy for exports entering the American market and as a tariff against imported American goods.
Saturday, November 29, 2008
The problems associated with America’s involvement in the World Trade Organization are vast, but they are not often discussed in media. The primary reason is the misconception that the United States is still the world’s preeminent superpower. We are all led to believe that the WTO does not truly hold much sway over such an economic juggernaut, and that its policies must be beneficial to the U.S., otherwise our government would simply leave the organization.
The truth is very different, the WTO has tangible control over the United States’ trade policies. As to the idea that all WTO policies are beneficial to the United States, one need look no further than the Value Added Tax to see this to be untrue.
Sunday, November 23, 2008
Unknown to most Americans, the United States is losing the ability to compete in global trade because of a little known agreement involving the Value-Added Tax (VAT). Foreign governments use this tax against United States producers as a means to prevent the importation and consumption of U.S. goods, while providing incentives for their countries to export their goods to the U.S. The VAT was a beneficial subsidy created after World War II to speed up their respective countries recovery. However, it is still used today by 149 countries to exploit this advantageous position against American trade.
Monday, September 08, 2008
Eastern Petroleum president Fernando Martinez pledged in Manila, Philippines on Monday to reduce gasoline prices on the premise that the value added tax on oil be removed.
Tuesday, July 01, 2008
The VAT tax must be amended for Americans to have access to fair trade. Bill H.R. 2600 proposes solutions to level the playing field so Americans can compete in the world market. Read more about bill H.R. 2600.
Below are facts you need to know about the VAT tax, which devastates the ability of U.S. goods to compete in world markets.
Wednesday, June 25, 2008
Americans are losing their ability to compete in global trade because of the value-added tax (VAT). Foreign governments use this tax against U.S. producers as a means to prevent the importation and consumption of U.S. goods, while providing incentives for their countries to export goods to the U.S. The tax was created to rebuild a war-torn Europe after WWII, but now Europe is rebuilt and no longer needs to enact this unfair tax, burdening Americans. In 1968, three countries used the VAT, but by 2001, 25 nations enacted this tax to gain a leg-up on American trade.
Pat Choate, economist and former running-mate of H. Ross Perot, recognizes U.S. trade policy is in shambles. Our government cannot stand up to the challenge of leveling the playing field. Choate sees that past efforts to amend the VAT tax (Click here to learn more about the VAT Tax in part 2 of the VAT tax series)
have failed and offers a feasible solution.
Tuesday, June 24, 2008
Americans are losing their ability to compete in global trade because of the value-added tax (VAT). Foreign governments use this tax against U.S. producers as a means to prevent the importation and consumption of U.S. goods, while providing incentives for other countries to export their goods to the U.S. The tax was created to rebuild a war-torn Europe after WWII, but now Europe is rebuilt and no longer needs to enact this unfair tax, burdening Americans. In 1968, three countries used the VAT, but by 2001, 25 nations enacted this tax to gain a leg-up on American trade. Because of this tax, America cannot compete in global trade.
In 2001, European countries had a VAT rate of 19.2 percent. By 2005, 94 percent of U.S. exports received a VAT tax. In the same year, foreign governments received rebates of $239 billion from the tax while collecting $131 billion from U.S. producers of goods and services.(Click here to learn more about the VAT Tax in part 1 of the VAT Tax Series).
Monday, June 23, 2008
Americans are losing their ability to compete in global trade because of the value-added tax (VAT). Foreign governments use this tax against United States producers as a means to prevent the importation and consumption of U.S. goods, while providing incentives for other countries to export their goods to the U.S. This was a tax loophole enacted after World War II to speed up European recovery, however is still used by 137 countries to exploit this advantageous position against American trade.
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