I lived with a VAT in Germany for a total of 7 years. I’m not saying I understand their system perfectly, but I do understand taxing a product at each level of transmission. In fact, we could file paperwork as Americans to receive something like 16% VAT taxes returned on items purchased on the local economy. When you went to the register, you didn’t have the sales tax ring up at 16%.
You did not have to pay the VAT because you were not a German citizen. German citizens pay both an income tax AND the VAT.
You really, really don’t want the German tax system in America!
“Income tax is imposed at progressive rates using complex tables. The lowest rate in 2014 is 14%. It goes up to 42% for income up to EUR 250’730.”
Source: http://www.capitaltaxconsulting.com/international-tax/germany/german-income-tax/
“German VAT is called Mehrwertsteuer (MwSt). It is also sometimes known as Umsatzsteuer (UST, or UmSt). The standard rate of German VAT is 19%, but a reduced rate of 7% may apply to some supplies.”
Source: http://www.brighton-accountants.com/blog/vat-uk-germany/
FairTax is imposed on ALL retail purchases of goods and services. There are no exemptions or exceptions; everyone pays (i.e., if a new item is purchased in the USA, the buyer, irespective of citizenship, will pay the FairTax), and at the same rate.
That is why we call it the FairTax.