[An.American.Expatriate]

Absolutely WRONG!

VAT is “added” (by the seller) at every sale - and removed by the seller at every resale - IOW it is “neutral” to the middle man. Except of course if he raises the price in between, which is why it us called a value added tax, the idea being that every middle man “adds” some value to the product ...

So, if a dairy farmer sold milk for $1.00/gallon and need to charge a VAT of 10%, the purchaser must pay $1.10. If the purchaser resells the milk for $1.00/gallon, the purchaser (you, the final consumer) must pay $1.10. The reseller offsets the $.10 paid with the $.10 received and pays “nothing”. The dairy farmer can offset other VAT paid for grain, equipment, etc against that which he received.

Don't get me wrong - VAT is an evil tax as it supposes that every link in the chain somehow “adds” value to the product (I have paid VAT on a CD with pdf documents that I could have downloaded from the Internet - simply for the value “added” by the postal workers who transported it) - but the arguments the author makes are incorrect - the price does NOT change due to embedded VAT taxes as they are offset ..

[I am Richard Brandon]

No none should think that VAT simplifies anything. The thinking processes of VAT inspectors is every bit as convoluted (they make and interpret the rules); as greedy (they have the exact same attitude as the IRS); and as oppressive as any tax gathering group in history.

The politicians can still 'game' the system - does VAT apply to food (is soda food?); shall we exempt children's clothing (Oh! to be a little person with no tax on small clothing sizes); shall we tax 'services' (what is a service?); and the example already mentioned - does transportation by UPS add 'taxable value'?

Plenty of ways to reward supporters here. Politicians do not change their spots and corruption rules!

[Tublecane]

“the price does NOT change due to embedded VAT taxes as they are offset”

Offset by what?