“Value Added Tax”, (i.e. VAT) a superior method of sales tax.

[Supposn]

“Value Added Tax”, (i.e. VAT) is a particular and superior method of administrating a sales tax.

Unlike prior (conventional) sales tax methods, VAT never taxes any prior levied taxes carried forward from prior sales transactions. Within a chain of sales links, the tax levied upon the purchaser within any transaction link is government’s total revenue realized up to that particular point within the chain of transactions.

Unlike other sales tax methods, enterprises reduce their amounts of VAT collected by the VATs they’ve paid, and only pass the difference on to the government. There is little advantage or reason for intermediate purchasers to request the seller not record a sales transaction.
///////////////////////////////////////////
VAT’s particularly suitable for global trade.
Governments waive taxes upon their exports, but they can only do so to the extent that they’re able to identify specific amounts of taxes levied upon the products within each of their export shipments.

VAT levied within the export sales’ transaction are the entire VAT (from all prior and the export link within the chain of sales transactions that can be identified and attributed to a shipment of exported goods.
The prices of exports from VAT nations are reduced by the greatest amounts.

In the case of a non-VAT nation, only sales taxes from the export transaction itself can be identified. The prices of exports are reduced by lesser amounts.

Other than sales taxes of any kind, there are few if any other taxes that can e identified and be attributed to the products within an export shipment.

[Excerpted from
“ </SPAN>http://www.brookings.edu/papers/2010/0722_vat_gale.aspx</SPAN> (http://www.brookings.edu/papers/2010/0722_vat_gale.aspx) “.

(Brookings Institute is widely regarded as a conservative think tank).</SPAN></SPAN>

The key distinction is that VATs are collected at each stage of production, whereas retail sales taxes are collected only at point of final sale. As a result, the VAT is easier to enforce and is widely regarded as having a superior administrative structure to a retail sales tax”.</SPAN>

Respectfully, Supposn</SPAN></SPAN>

[Kathianne]

[/quote=supposn](Brookings Institute is widely regarded as a conservative think tank).[/quote]

Brookings is widely regarded as a liberal think tank.


Brookings states that its scholars "represent diverse points of view" and describes itself as (http://en.wikipedia.org/wiki/Brookings_Institution)non-partisan (http://en.wikipedia.org/wiki/Non-partisan), (http://en.wikipedia.org/wiki/Brookings_Institution)[ (http://en.wikipedia.org/wiki/Brookings_Institution#cite_note-about-2)2] (http://en.wikipedia.org/wiki/Brookings_Institution)[ (http://en.wikipedia.org/wiki/Brookings_Institution)5] (http://en.wikipedia.org/wiki/Brookings_Institution#cite_note-research-5) while the media most frequently describe Brookings as "liberal" or "centrist." (http://en.wikipedia.org/wiki/Brookings_Institution)[ (http://en.wikipedia.org/wiki/Brookings_Institution#cite_note-6)6] (http://en.wikipedia.org/wiki/Brookings_Institution) (http://en.wikipedia.org/wiki/Brookings_Institution)

As stated in OP, VAT is a sales tax, one of the most regressive tax types possible. Near 100% of poor-middle class income would be taxed, while incentivizing savings for those with choice expenditures.

Anyone in states with a sales tax knows the tax continues to escalate and other taxing bodies tend to piggy back on them. Living in IL we've watched sales taxes go from less than 3% to over 8% in the past 20 years or so. See it especially on gas prices, which counties and cities have added too, not too mention the federal government also adding.

It's a flat tax, such as has been pushed as an alternative to the income tax, though with some safeguards built in to protect some income for the lower income folks.

[tailfins]

Brazil has a value added tax. Many manufactured items are DOUBLE what they are here. It's called the ICMS. It is 18% and is charged at EACH stage of production.

http://www.vatlive.com/global-vat-gst/brazil/brazil-vat-icms-ipi/

Here's an IPad mini for ONLY $800. For such an incredible deal, YOU must arrange for it to arrive in your home because it's only available in Sao Paulo.

http://produto.mercadolivre.com.br/MLB-466577134-ipad-mini-16-32-64gb-wifi-ou-3g-incrivel-pronta-entrega-sp-_JM

[jafar00]

A VAT (or GST as we have in Aus) is simpler in an admin sense, but if done as it is in Australia, the tax burden is I think pushed towards the middle classes. In Australia, after the GST was introduced, food and essentials became more expensive, and luxuries like computers became cheaper.

[fj1200]

(Brookings Institute is widely regarded as a conservative think tank).

The key distinction is that VATs are collected at each stage of production, whereas retail sales taxes are collected only at point of final sale. As a result, the VAT is easier to enforce and is widely regarded as having a superior administrative structure to a retail sales tax”.

Brookings? Conservative? Oh geez. (thanks Kathianne)

How you describe the VAT is exactly why it is inferior to the FairTax. Administration at every level is not superior administratively unless you prefer a regime the increases the bureaucratic complexity of private enterprise.

[cadet]

Brookings? Conservative? Oh geez. (thanks Kathianne)

How you describe the VAT is exactly why it is inferior to the FairTax. Administration at every level is not superior administratively unless you prefer a regime the increases the bureaucratic complexity of private enterprise.

That's just what we need, more complex business.
http://articles.latimes.com/2012/may/27/business/la-fi-medical-prices-20120527

Getting the Gov't as steeped as it is in daily business is bad enough. If you ask me the only thing any Gov't tax does is increase the price on the people.
In the end of it all, the only thing that matters is the end tax. If you add a bunch of little taxes, that car that costs 1000 to produce and another 1000 to make a really good profit, is going to cost closer to 25,000 thanks to tax.
Does it hurt the business? Yes, because they can't sell as many. Does it hurt the customer? yes, because all that extra tax get's unloaded on them.

It doesn't matter how much tax you put on something, a company will just raise their product so that they're still making the same profit.

[fj1200]

That's just what we need, more complex business.
http://articles.latimes.com/2012/may/27/business/la-fi-medical-prices-20120527

Bingo:

"It frustrates people because there's no correlation between what things cost and what is charged," said Paul Keckley, executive director of the Deloitte Center for Health Solutions,a research arm of the accounting firm. "It changes the game when healthcare's secrets aren't so secret."


Getting the Gov't as steeped as it is in daily business is bad enough. If you ask me the only thing any Gov't tax does is increase the price on the people.
In the end of it all, the only thing that matters is the end tax. If you add a bunch of little taxes, that car that costs 1000 to produce and another 1000 to make a really good profit, is going to cost closer to 25,000 thanks to tax.
Does it hurt the business? Yes, because they can't sell as many. Does it hurt the customer? yes, because all that extra tax get's unloaded on them.

It doesn't matter how much tax you put on something, a company will just raise their product so that they're still making the same profit.

Especially when a VAT is typically added ON TOP of other tax regimes whereas the FairTax proposes eliminating all others. Of course I'm sure that's why Brookings :cough: liberal :cough: would prefer the VAT.

[tailfins]

That's just what we need, more complex business.
http://articles.latimes.com/2012/may/27/business/la-fi-medical-prices-20120527

Getting the Gov't as steeped as it is in daily business is bad enough. If you ask me the only thing any Gov't tax does is increase the price on the people.
In the end of it all, the only thing that matters is the end tax. If you add a bunch of little taxes, that car that costs 1000 to produce and another 1000 to make a really good profit, is going to cost closer to 25,000 thanks to tax.
Does it hurt the business? Yes, because they can't sell as many. Does it hurt the customer? yes, because all that extra tax get's unloaded on them.

It doesn't matter how much tax you put on something, a company will just raise their product so that they're still making the same profit.

It will reduce consumer choice. The cost of maintaining inventory and selection will increase markedly. It also makes shortages more likely with the associated "shortage pricing".

[DragonStryk72]

That's just what we need, more complex business.
http://articles.latimes.com/2012/may/27/business/la-fi-medical-prices-20120527

Getting the Gov't as steeped as it is in daily business is bad enough. If you ask me the only thing any Gov't tax does is increase the price on the people.
In the end of it all, the only thing that matters is the end tax. If you add a bunch of little taxes, that car that costs 1000 to produce and another 1000 to make a really good profit, is going to cost closer to 25,000 thanks to tax.
Does it hurt the business? Yes, because they can't sell as many. Does it hurt the customer? yes, because all that extra tax get's unloaded on them.

It doesn't matter how much tax you put on something, a company will just raise their product so that they're still making the same profit.

That's why I and FJ support the FairTax. It's far simpler in both execution, and in administration because it does not tax at each individual stage like a VAT. Instead, the tax is applied at only one point, that being the final retail sale of the item in question, and that's it. There's no point in taxing business to business purchases, because really, it just requires the business to raise their price to compensate, as well as hire extra accountants to maintain the tax files.

But then, the FairTax also calls for an end of the income tax, and the 16th Amendment so that the government can no longer pull from your paycheck directly. It leaves americans with their full paychecks, while at the same time, simply moves all the imbedded tax that stacks up to the end of the transaction, making it so that the prices stay the same, but you have your full paycheck (minus your benefits). Is it perfect? No, but our current system is so much worse.

The Fair Tax is also superior, in my opinion, because it's far more difficult for the politicians to screw with. You can't play to his little group, or that little group, because any change made to the tax hits everyone. No more of this "Oh, we're only going after the rich", or granting tax breaks for whatever group a politician needs to stay in office.

[Robert A Whit]

That's why I and FJ support the FairTax. It's far simpler in both execution, and in administration because it does not tax at each individual stage like a VAT. Instead, the tax is applied at only one point, that being the final retail sale of the item in question, and that's it. There's no point in taxing business to business purchases, because really, it just requires the business to raise their price to compensate, as well as hire extra accountants to maintain the tax files.

But then, the FairTax also calls for an end of the income tax, and the 16th Amendment so that the government can no longer pull from your paycheck directly. It leaves americans with their full paychecks, while at the same time, simply moves all the imbedded tax that stacks up to the end of the transaction, making it so that the prices stay the same, but you have your full paycheck (minus your benefits). Is it perfect? No, but our current system is so much worse.

The Fair Tax is also superior, in my opinion, because it's far more difficult for the politicians to screw with. You can't play to his little group, or that little group, because any change made to the tax hits everyone. No more of this "Oh, we're only going after the rich", or granting tax breaks for whatever group a politician needs to stay in office.

Well, count me in on that team. I have been arguing for the FAIR tax since not too long after it came out as a proposed law.