The United States will ultimately be necessary to introduce a national value added tax to reduce its budget deficit, told CNBC on Thursday, Paul Donovan, chief executive and deputy chief economist at UBS. Taxing consumption has never been on the agenda of the United States. “The United States is the only OECD member state without value added tax, but I think I will need to change that at some point,” said Donovan. “This is a cheap way to raise funds, but is not particularly fair since it falls disproportionately on groups with lower income. So perhaps it will require some changes in tax legislation to avoid it. But overall this is a good way to collect money, “continues the economist. Proposals to close the loophole allowing international companies to avoid U.S. income tax at the time of her repatriation, were overshadowed by the U.S. government attempts to stabilize the economy. According to Donovan such proposals have a single effect. They do not contribute to sustainable increases in tax revenues. “We all know that taxes in the United States will increase, but it is frustrating to say the consumer. It is better to leave them to shop with the thought that so far their incomes will be affected, “he reflects. “There is no dispute, however, that consumers will have to reduce their costs, and it in all directions.”
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