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To: foxfield
Actually, the VAT is neither an income tax nor a consumption tax; it is a tax on incremental work-in-process, hence, a "value-added" tax.

The VAT tax is a tax embedded in the retail price, exactly the same as the Fair Tax. Similarly, it also doesn't apply to used goods. The structure of the VAT tax is there to prevent some of the common methods of avoiding a tax imposed only at the retail level.

Regardless of how you parse it, both the VAT and Fair Tax can be calculated as a %of the final retail price.

The VAT just takes a proportional bite at each level of production.

34 posted on 01/31/2008 11:05:41 AM PST by slowhandluke (It's hard work to be cynical enough in this age)
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To: slowhandluke

Just because the FT and a VAT CAN be calculated as a percentage of price does not make them equivalent in economic consequence or administration or enforcement.

The Fair Tax IS NOT as VAT in that it is not, repeat NOT levied at each stage of production. It is levied at the point of final sale. The organizations charged with collection are the retail sellers, not the producers.

The Fair Tax is similar to the VAT in economic consequence. It is eligible for full border-adjustment, as is the VAT.


52 posted on 02/01/2008 6:55:31 AM PST by DivaDelMar (CRAm member-- (Conservative Republicans Against mcCain) Think you're entitled to my vote? CRAm It!!!)
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