> “A VAT is a form of consumption tax that falls on consumers rather than producers.”
No, a VAT is not a consumption tax. A consumption tax is a sales tax levied on consumers. The consumer is the endpoint of the supply and production chains. A tax on consumers is a retail tax in the form of a sales tax.
A VAT, or Value-Added-Tax is a tax levied on each vendor, supplier, assembler, fabricator. It is a tax on each stage of production, a supply chain tax applied at all points in the nodal network of B2B activity. All the VATs applied are HIDDEN from the consumer.
A true retail consumer tax is completely transparent. All taxes in the production stages are reduced to zero and are shunted to the end of the chain at the retail consumer endpoint.
The fact that a true retail consumption tax is completely transparent is very disturbing to those who make their living by dreaming up new and old ways to tax everyone else.
Rather than support a transparent consumption tax, friends of taxes will always opt for taxes they can hide. They like the VATs.
Agreed—It’s late...I should have spelled that out...
Yes, seems the idea of a VAT tax rears its ugly head every five or ten years...As you say it is not transparent and adds a lot of cost to the end product.
I don’t live in Europe—don’t want European tax system...
I just found the whole issue troubling. Trump has said he won’t mess with people receiving SS (I don’t ...yet). However, the fact that some are considering a VAT to replace funding is really bad idea IMHO.
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).
My vote is National Sales tax, even the low life’s have to pay for what they buy, even visitors to the US have to pay it. And make a balanced budget a must. TN is sales tax only, except for the very rich who pay a Halls Income Tax. We are Mandated to balance the budget yearly. Each pay according to what they spend, exceptions are food and medical no sales tax there.
Buy a $30K car vs a $200K car that rich person actually pays more. And eliminate sheltering income off shore, make congress pay their taxes...rangel yours are well past due.
To move to a VAT is like instant inflation.
Bump!