Key Takeaways
The US lacks a federal VAT system due to its federalist system of government, which delegates tax management responsibilities to individual states. Implementing a centralized, nation-level VAT system in the US would require significant efforts to unify diverse tax systems. Currently, there are over 12,000 taxing jurisdictions for sales tax in the USA, creating a complex patchwork of regulations and rates across the country. It would also incur substantial costs and present challenges both to the government and businesses.
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