[ancient_geezer]

You've heard of the EU right? VAT hasn't exactly been a good thing there....

Says who?

 

• How a Value Added Tax Would Harm the U.S. Economy

• Australia - Cash economy continues to grow

• Why do Europeans Work so Little?

• Tax distortions, household production
  and black-market work

• THE NATURE OF THE UNDERGROUND ECONOMY.
  SOME EVIDENCE FROM OECD COUNTRIES

• Who Pays The VAT ?

[Your Nightmare]

How a Value Added Tax Would Harm the U.S. Economy

This one is a joke. Did you read it? The basic argument is that countries with a VAT have a higher level of taxation. So? There was no cause and effect established.

Australia - Cash economy continues to grow

The problems with Australia's GST and the black market are a warning for both the VAT and the NRST. Does this story sound familiar?

When the Prime Minister and the Treasurer were making the case for the introduction of the GST in the lead up to the 1998 federal election, and during the period up to July 2000, it was claimed, amongst other things, that the GST would wipe out the cash economy. They argued that the GST would increase the tax base and revenue raised would be used to fund the growing demand for public goods and services. Many experts at the time doubted the Government’s claims as there was no empirical evidence anywhere in the world that the introduction of a GST or VAT had achieved any such outcome. In countries where similar attempts were made to reform the tax system the outcomes have been less than favourable.

The chickens have now come home to roost. The Government’s claim has been shown for the illusion that it always was. The recent study by Christopher Bajada of the University of Technology in Sydney has shown quite conclusively that the black economy is significant and growing. According to the study, the black economy is estimated to be up to 15% of GDP. Based on the 2002/03 federal budget that was presented by the Treasurer in May this year, GDP is approximately $740 billion. That means that the extent of the black economy is as high as $110 billion.

Tax distortions, household production and black-market work

More black market stuff?

THE NATURE OF THE UNDERGROUND ECONOMY. SOME EVIDENCE FROM OECD COUNTRIES

Even more black market stuff! How exactly do you expect the NRST to avoid this same problem? In fact, it would be worse with a NRST. If this is your only complaint against a VAT you have a pretty weak argument.

Who Pays The VAT ?

This is just a incidence study of the VAT, not a study of how it effects the economy. I wouldn't expect the incidence of a VAT to be much different than a NRST so what's your point?