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Is a State VAT the Answer? What’s the Question?

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Author Info
Richard M. Bird () (International Tax Program, Rotman School of Management, and Institute of Municipal Finance and Governance, Munk Centre for International Studies, University of Toronto, 105 St. George Street, Toronto, ON, Canada M5S 3E6,)

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Abstract

I argue in this paper that state value-added tax is more likely to be the right way to tax sales at the state level than seems to be recognized in most current US discussion. As Canadian experience demonstrates, a state VAT is both better in principle than even the best state retail sales tax (RST) and should be not much more difficult to administer in practice at the state level. A principal reason why states should consider VAT as a possible replacement for an RST is to make themselves more competitive by removing the present distorting and undesirable tax on business imposed through RSTs.

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File URL: http://www.rotman.utoronto.ca/iib/ITP0703.pdf
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Publisher Info
Paper provided by International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto in its series International Tax Program Papers with number 0703 Classification - JEL: H71.

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Length: 27 Pages
Date of creation: 2007
Date of revision:
Handle: RePEc:ttp:itpwps:0703

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Postal: 105 St. George St., Toronto, Ontario, M5S 3E6
Phone: 416 978 2451
Fax: 416 978 0002
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Web page: http://www.rotman.utoronto.ca/iib
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