Forget anything resembling a Vat
One tax initiative that should be strangled before it sees the light of day is to give a tax rebate to exporters and to impose taxes on imports. This would allegedly even the playing field for countries that have the VAT or a variation of it. These levies are rebated on items that are exported.
Shopping-minded tourists to countries like Britain know this process well: You buy something like a nice pair of shoes, get a VAT rebate form from the retailer, have it stamped at the airport and then plop it in a special mailbox. Weeks later you receive a check or a credit on your card. This supposedly boosts sales. Since the U.S. doesn’t have a national sales tax, we can’t do the same thing.
To get around this, some people are advocating that we slap a levy on imports to make their prices what they would have been sans the VAT rebate or not let importing companies deduct the cost of these items. Exporters would get a tax credit of some sort so that their products would be cheaper, just as if a VAT had been rebated.
It’s a bad idea. Why do we want to make American consumers pay more for products while subsidizing foreign buyers? It also could put us on the slippery slope to our own VAT.
Concerning the supposed advantage VAT nations have, the answer is not to try to imitate them but rather to reduce our tax burden, which thereby reduces the costs of making products and services. Combined with reductions in regulations (which Trump has promised to do), lower taxes would help American companies be highly competitive again. Lest we forget, regs are another form of taxation.