Article

Lessons from Canada and the WTO: The U.S. Should Embrace a VAT

Authors: Peter Glicklich, Heath Martin, Dov Whitman and Fred Purkey

The current Republican government in the United States campaigned on a promise of comprehensive tax reform. As a result, many commentators believe big changes – including a consumption tax like a value-added tax (VAT) – may now be possible.

In this article, originally published in Bloomberg BNA’s Tax Management International Journal, Davies partners Peter Glicklich and Fred Purkey with associates Heath Martin and Dov Whitman explain that hurdles to VAT enactment are lower than they have ever been, because the Republican Blueprint for Tax Reform includes a form of consumption tax. Given this movement, the authors suggest that the United States may learn from Canada in considering whether to adopt a VAT. They acknowledge the political hurdles but suggest use of a “long lens” to surmount the likely hurdles. In particular, they examine Canada’s experience with its VAT – the goods and services tax (GST) – and conclude that while there are likely short-term political costs, the VAT could come, in time, to be viewed as a “fair necessity.”

Download this article.

Key Contacts

Expertise

Related

Canadian and U.S. Tax Laws: A Review of 2019 and a Look Ahead to 2020

Jan. 30, 2020 - In our annual Tax Review and Outlook report, we look back at significant developments that shaped the Canadian and U.S. tax landscapes in 2019 and offer our predictions on what to expect in the year ahead. Key Canadian Developments in 2019 Proposed changes to the employee stock option rules...

U.S. Tax Laws: A Review of 2019 and a Look Ahead to 2020

Jan. 30, 2020 - Review of U.S. Tax Developments in 2019 In 2019, the U.S. tax world continued to be primarily concerned with developing guidance under the monumental Tax Cuts and Jobs Act (TCJA), which was enacted at the end of 2017. Major regulatory projects were proposed beginning in 2018,...