Magazine article Editor & Publisher

Beware the VAT

Magazine article Editor & Publisher

Beware the VAT

Article excerpt

OFFICIALS AT ALL levels of government are constantly searching for new revenues to finance their programs - which means finding new taxes.

In Washington, a national sales tax has been discussed. Now we hear of the possible introduction of legislation to add a VAT, or value added tax, which would tax businesses on the value they add to a product. The consumer ends up paying it. The Wall Street Journal reports that 36 countries have either a VAT or a national sales tax. This undoubtedly will be used as an argument that we should do it too.

If the administration gets serious about either proposal, you can be sure the retail price of print media will be included. Once, the price of reading matter - newspapers, magazines and books - was exempt from state and local sales taxes. Now there are six states that apply sales and use taxes to certain types of circulation income. Every year, there are attempts in more and more states to drop the exemption for newspapers.

We call it a tax on reading. It will spread. Rarely is a tax ever rescinded. It just increases the cost of reading matter to the public, forcing more and more reliance on the free media. No one has faced up to the issue of discrimination - taxing the distribution of some news media and not others.

Britain is one of those countries with a VAT. The Journal reports that Britain's basic VAT has grown to 17.5% today from 10% in 1973. That experience is duplicated in other countries. …

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