It is good to hear people honestly use the "VAT" word. This brings far more credibility and honesty to tax reform debates. After all, the flat tax that gets so much attention is a modified subtraction VAT. We see states today struggling with making their sales taxes work and some have enacted or are considering gross receipts taxes. A VAT would be better options as it would (should if structured right) eliminate pyramiding. A VAT along with an income tax focused on high income taxpayers is an even more honest idea since VATs are regressive and to help achieve revenue AND distributional neutrality, the income tax is needed. The GAO issued a report at the request of two House Ways & Means Committee members this week. It looks at VAT in 5 countries including two with fairly new VATs. It looks like a good report and raises another good point - there is so much VAT experience in the world that we can learn a lot about how to do it right from the experiences of other countries(should we pursue a VAT and modified income tax in upcoming reform efforts). I just posted an entry on VAT the other day with links to the GAO report. I note the perceived "VAT-phobia" in this country - something we'll have to get past to have better tax reform discussions.