In reality, there is little difference between a VAT and a sales tax as you are able to effectively pass the VAT all the way into the consumer/end user with tax credits for other payments. The only real difference is their VAT is larger than our sales tax and the tax must be included in the display price whereas our sales tax does not typically (although some attempts have been made to get sales tax in the US to work the same way).
> “In reality, there is little difference between a VAT and a sales tax as you are able to effectively pass the VAT all the way into the consumer/end user with tax credits for other payments.”
Uh no.
Every business cost including taxes is passed along from business to business (B2B) to the consumer retail endpoint purchase.
A sales tax is borne by the consumer and is not passed further as it is applied to the endpoint of the chain.
B2B VATs are passed along in HIDDEN fashion out of the view of the consumer.
A VAT applied directly to the consumer only is a sales tax but the consumer does not see the HIDDEN B2B VATs. This is why legislatures like VATS because they can pick and choose which node in the B2B network to apply a VAT and the consumer will never know why the price is higher. Higher prices due to VATs will be blamed on the retailer.
VATs are hidden, Sales Taxes are revealed in plain sight.