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To: posterchild
I'm not an expert, but I think it goes like this:

Farmer grows wheat and sells it to a miller (VAT taxed) the miller grinds the wheat and sells it to a baker (VAT taxed) the baker makes bread and sells it to a supermarket (VAT Taxed) and the market sells it to you (VAT taxed). Hope you enjoy the $11 loaf of bread.

With a retail sales tax, the taxing begins and ends when the market sells a loaf to the consumer. Hope you enjoy your $3 loaf of bread.

11 posted on 01/22/2012 7:05:27 AM PST by ClearCase_guy (Nothing will change until after the war.)
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To: ClearCase_guy

Assuming the same rate (otherwise there is no basis for comparison), is not the VAT only on the ‘value added?’ i.e. if the baker buys flour for 2$ and sells the baked good for $3 is the tax not on just the $1 difference?

In the end, as long as the tax mechanism is consistent to all parties and is hard to evade (and hence give unfair advantage to criminals), I’m more concerned with how much government takes in and what it is spent on. Solve that problem and then the taxation mechanism can be dealt with as a mere accounting problem.


16 posted on 01/22/2012 7:15:48 AM PST by posterchild (I'm old enough to remember when journalists bothered to look things up on wikipedia.)
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