Odey: Trump Will Introduce a VAT; Spur 7% Inflation

``(Trump) will propose a version of VAT as we have it in Europe. He may propose a 20% rate. It will be a Federal tax. Why VAT? Because exports are exempt from VAT. It will make all goods covered by VAT 20% more expensive, but it will mean tha t exports become 20% cheaper than imports. To cries of ‘this will be so unpopular hurting the little man', my reply is that with the US at full employment, these costs will be passed on in full. Also, remember that in Europe where VAT is now 20%, actual tax collected is only 7% of GN P (i.e. only 35% of the economy is paying this tax). He will sell it to his supporters because he will explain that foreign imports are disproportionately affected by this tax. It will bring in $1.2 trillion, which he then must spend to keep the economy going. He will spend this on a combination of corporate tax cuts, capital spending incentives and infrastructure programmes.''