We do not yet know the answer to this question but I'd like to share an invitation I received this week from KPMG to attend a webcast entitled Will the US Adopt a Value-added Tax (VAT)? to be held Wednesday, October 14, 2009 from 1:00 p.m. - 2:30 p.m. (ET) conducted by The Tax Governance Institute . The webcast is free and requires registration.
According to KPMG "Projected federal budget deficits are leading tax policy makers to look for additional revenue sources. Alan Greenspan has said, 'I think that there is a fairly significant probability that the least worst solution to the [budget] problem will end up to be a value-added tax, because it's the only thing that raises revenue in significant quantities without significantly impacting on the economy.' " Wikipedia defines Value added tax (VAT), or goods and services tax (GST) "as a consumption tax (CT) levied on any value that is added to a product ... [and while] Personal end-consumers of products and services cannot recover VAT on purchases, businesses are able to recover VAT on the materials and services that they buy to make further supplies or services directly or indirectly sold to end-users. In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state."
If you can't attend the webinar stay tuned. I will review the presentation later next week along with additional research to help determine the potential impact of this possible enactment upon the procurement sector.