As I understand it, a value added tax is a tax on the difference between the sales price of a product and the cost of producing it. Somebody buys flour, water and yeast and sells bread; he pays a tax on what he made from the bread, minus the cost of his materials and overhead. A sandwich shop slaps ham and cheese on a couple slices of bread, and is taxed on the price of the sandwich minus the cost of the bread, ham, cheese, labor, etc.
Many countries use VATs, and it has often been suggested for the U.S. How does it work in practice? How are costs allocated in something as complex as a car or a house? How complex is the record-keeping? What is the potential for fraud? Why is it superior to a basic sales tax, where most sales are taxed at the same flat rate? Etc.
Many countries use VATs, and it has often been suggested for the U.S. How does it work in practice? How are costs allocated in something as complex as a car or a house? How complex is the record-keeping? What is the potential for fraud? Why is it superior to a basic sales tax, where most sales are taxed at the same flat rate? Etc.
via International Skeptics Forum https://ift.tt/311QSyq
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