[PapaBear3625]

How so? Why would a VAT, or any tax, capture revenue from the distribution of illegal goods, in a illegal supply chain, illegally distributed to retail buyers?

Drug dealers don't pay income taxes on the drugs they sell, but they would pay VAT on the food and bling they buy.

[dfwgator]

Won’t people just more buy more stuff in other countries that don’t have the high VAT?

[OldDeckHand]

"Drug dealers don't pay income taxes on the drugs they sell, but they would pay VAT on the food and bling they buy. "

Are merchants allowed to write-off their sales of products to drug-dealers? Of course not. So, the government is already capturing a revenue stream from those transactions by way of income tax paid by the merchants, are they not?

Perhaps one could make a meritorious argument about a national sales tax in lieu of an income tax with respect to capturing revenue from illicit activities. But, a VAT is a tax that is levied in addition to an income tax. As such, I believe the negative effects of such a tax on the larger economy far outweigh the benefits of such a tax with respect to the "black market", IMHO.