Heritage Foundation: VAT Hurts Savings

In a recent report by the Heritage Foundation, the group criticizes the use of a value added tax to solve deficit problems arguing that the tax will "hammer private saving for an extended period" while consumers save less to maintain current lifestyles.  The report counters claims that the tax would increase savings by taxing consumption.  The report can be found at http://www.heritage.org/Research/Reports/2010/12/Value-Added-Tax-Why-the-VAT-Is-Not-Pro-Saving.

Posted by James G. Haskell, Senior Associate Editor, Wealth Strategies Journal.