The value-added tax (VAT) in China has the unusual feature that capital goods are included in the VAT base. In addition …, most services are subject to the business tax, which is not creditable against VAT, but which accrues to local governments …

Like the theory of the second best that the 2006 congress marks, the VAT is now fifty years old. Judged by the extent … and speed of its spread around the world, and the revenue that it raises, the VAT would seem to have been a remarkable … prominent of these. One is the fear (raised mainly in the United States) that the VAT actually does too good a job of raising …