Consumption Taxes This analyst erroneously implied that value added taxes are cumulative through the supply chain when in fact any VAT paid on an input is deductible, thus ensuring it is the final customer paying the tax. The VAT is an important discussion point because the Trump Administration compares them to the tariffs now being applied to trading partners. According to the OECD, consumption taxes comprise 30 percent of total tax revenues, and they have been increasing in nearly 60 percent of the 38 richest countries.  The U.S. predominantly uses an income tax for government revenues, seeing consumption taxes as regressive since they tend to have greater impact on lower income consumers. Critics also argue that tariffs are inflatio...

TAGS – North America, Macroeconomics