Been to Paris lately? If you picked up a bottle of perfume, a silk tie or a chic little designer sweater, you have a fresh reminder of the VAT: It's the refund from France's value-added tax you received when you left the country.

Just like our state sales tax, the VAT is an assessment on sales to consumers except that this tax is assessed and collected at different stages of the production process, and not, as with the state sales tax, as a percent of the retail price when the consumer buys the product or service. Since it is assessed at various stages, the VAT increases the ultimate cost of the product. Tourists, however, are exempt from the run-up of value-added costs, hence the rebate you receive when you leave the country, sales receipts in hand.

Most Western or developed countries use a VAT and rely on it for a good chunk of their revenue. For a country like France, which first implemented the tax in 1954, it is the main source of revenue, accounting for nearly half of the money the country raises to balance its budget.  could help solve some of the federal government's deficit problems. Those needs are daunting enough that President Obama has set up the National Commission on Fiscal Responsibility and Reform and charged its bipartisan members with figuring out how to bring federal accounts into better balance.  More here from Governing Magazine