America's VAT(Value Added Tax)

The gigantic deficits the Administration is projecting are appalling, and they provide a chilling look at our future America is hurtling towards a fiscal trap that is forcing us into the only option have to restore budgetary sanity A Value-Added Tax.

It's not an option Americans understand, or ever hear debated much. In fact, most folks probably never heard of it. And if they had, they probably wouldn't want it; since it's the bulwark of an economic system alien to the American model the social democratic economies of Europe.

But the sheer scale of the expected numbers makes it practically inevitable that the U.S. will soon adopt a big VAT. It's the only vehicle capable of raising the money to cover the gigantic projected increases in spending and deficits.

Briefly, a VAT resembles a sales tax passed in the end onto the consumer at the register. But the government collects most of the money during the stages of a product's manufacture. Since manufacturers are writing the checks, it's an extremely efficient, virtually fraud-free way to collect money.

But it's never gotten much support in the U.S. for two reasons. First, it's a regressive tax: Low-earning families pay a bigger portion of their incomes than the wealthy. And second, the VAT first introduced by a French civil servant in 1954 has fueled the rapid growth of government in France, Germany, and even Japan. In fact, no other country spends the kind of money were planning to spend without a VAT.

The government wants to see the legally signed XML customer's invoice that is accepted by both sides so that companies cannot cheat on the VAT. Therefore every single invoice and movement of goods, from either inside or outside the country, needs to be approved by the government before shipment. Government auditors have a quota and mine the database to fine companies for non-compliance. VAT countries are moving to this Brazilian NF-e model.