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The Value-Added Tax and American Agriculture

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  • Woods, W. Fred

Abstract

A value-added tax (VAT) has been mentioned as an alternative to increasing Federal taxes. Since the Common Market has implemented such a tax, current literature draws heavily upon the EC experience. However, differences between U.S. and Common Market conditions have led to confusion over the nature of a value-added tax and its possible use in this country. Exactly how the VAT would affect various sectors of the U.S. economy would depend in part upon the method used to calculate the tax and the Government's method of imposing the tax. Adoption of a new tax such as a VAT might give the United States the opportunity to undertake desired reforms in its tax structure without either increasing the impact of present taxes on taxpayers or reducing total Federal tax revenues. Should a U.S. value-added tax be adopted, farmers should, to the greatest possible extent, be full participants in the tax plan for best results. For instance, exemption for farmers would penalize them since they would have no means of claiming credit for taxes paid on inputs. At the same time, recognition of special characteristics of agriculture is necessary, particularly where small farmers are concerned.

Suggested Citation

  • Woods, W. Fred, 1974. "The Value-Added Tax and American Agriculture," Miscellaneous Publications 324767, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersmp:324767
    DOI: 10.22004/ag.econ.324767
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    References listed on IDEAS

    as
    1. Lindholm, Richard W, 1970. "The Value Added Tax: A Short Review of the Literature," Journal of Economic Literature, American Economic Association, vol. 8(4), pages 1178-1189, December.
    2. Coffman, George W., 1971. "Corporations with Farming Operations," Agricultural Economic Reports 307443, United States Department of Agriculture, Economic Research Service.
    3. Guillaume, Y. & Waelbroeck, J., 1972. "Impact of the added value tax on an economy; The case of Belgium," European Economic Review, Elsevier, vol. 3(1), pages 91-108.
    4. Eisner, Robert, 1971. "What Went Wrong?," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 629-641, May-June.
    5. Thomas S. Adams, 1921. "Fundamental Problems of Federal Income Taxation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 35(4), pages 527-556.
    6. GUILLAUME, Yvan & WAELBROECK, Jean, 1972. "Impact of the added value tax on an economy: The case of Belgium," LIDAM Reprints CORE 110, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    7. Brittain, John A, 1971. "The Incidence of Social Security Payroll Taxes," American Economic Review, American Economic Association, vol. 61(1), pages 110-125, March.
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    Cited by:

    1. Bell, Bonita, 1975. "Economics of Agriculture: Reports and Publications Issued or Sponsored by USDA's Economic Research Service, July 1973-June 1974," Miscellaneous Publications 321806, United States Department of Agriculture, Economic Research Service.

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