Washington Retail Insight

Subcommittee Rejects Amendment to Ban Value Added Tax

By J. Craig Shearman
Washington Retail Insight
July 30, 2010

A House panel this week rejected an amendment that would have placed a permanent ban on implementation of a national Value Added Tax.

The amendment was offered on Thursday by Representative Mark Kirk, R-Ill., as the Appropriations Committee’s Subcommittee on Financial Services and General Government approved a $24.5 billion spending bill for the Treasury Department and independent agencies.

The provision would have prevented the Internal Revenue Service – part of Treasury – from imposing a VAT during the upcoming fiscal year or at any time in the future.

Kirk said he was concerned that the Obama Administration is considering such a tax and that it would have a negative impact on businesses. President Obama told members of his deficit commission this spring that all options – including a VAT – should be considered as the panel moves toward recommendations scheduled to be presented by December.

Subcommittee Democrats opposed the Kirk amendment, and it was defeated 9-5 on a party-line vote.

NRF is strongly opposed to creation of a VAT because of the impact it would have on consumer spending, and has commissioned a VAT study that is currently being conducted.

© 2010 National Retail Federation