A VAT eliminates inequitable tax burdens on exports---status quo exports can’t compete.

A VAT is a straightforward means to pay for BIG, and instituting VAT would also assist with another problem the United States faces. This problem has to do with taxes and international trade. The sleep-inducing powers of the US tax system are exceeded only by those of international tax codes and agreements, so I will be brief. Basically, income tax is a tax focused on producers while VAT is a tax focused on consumers. European nations have VAT and income tax, but it will help to assume that all their taxes come through VAT. When exporting goods to Europe, US companies must pay tax as a producer and then, when the goods arrive in Europe, consumers are charged VAT. When Europeans export goods to the United States, they do not pay VAT, and Europeans do not pay American income tax. So, goods exported from the United States are taxed twice (once on American producers and once on European consumers) while European goods are not taxed at all. This is a greatly simplified description, but it is in essence the truth. If the United States introduced a VAT, it would put the country on a fairer playing field with the rest of the world in terms of international trade. There are only two reasonable options for rectifying the current situation. One would be to change international trade laws to alter how VAT and income tax applies to imports and exports. The chances of doing this are slim to none. As noted, the United States is the lone holdout that does not charge VAT, and so other countries are not going to be particularly motivated to change a system that now favors them. The only realistic choice is for the United States to change to the model that most other nations have adopted. As it stands, US companies are forced to compete with a heavy tax disadvantage; a situation that does not seem tenable in the long run.