Isabel V. Sawhill, senior fellow at the Brookings Institution think tank, wrote in the Nation that the tax is "a relatively efficient way of raising revenue, producing far fewer distortions than the current income tax."
And by encouraging saving and productivity, "it is exactly what the nation needs to raise future standards of living," she wrote.
She noted that a 10-percent broad-based VAT could generate around 500 billion dollars a year by 2012, citing the Brookings-Urban Tax Policy Center.
"In my view, the way to make this politically palatable while advancing other policy goals is to use some of the revenues to provide a refundable credit to lower-income households, thereby offsetting the regressive features of the tax, some to lowering the corporate tax rate to make the U.S. more competitive with other countries, and some to eliminating income taxes for many in the middle class ... More affluent Americans would continue to pay income taxes," she wrote.
In spite of the debate, some economists doubt the VAT will be implemented in the near future, if at all.
"I don't think it's likely any time soon," said Dean Baker, co-director of the Center for Economic and Policy Research think tank. "Somewhere down the road we might get it."
