The VAT-man cometh? (OneNewsNow.com)

The VAT-man cometh? (OneNewsNow.com): "Recently, progressives have made noise about introducing a value-added tax (VAT) in the United States. The VAT is an indirect tax — that is, Americans wouldn't pay the tax directly to government, but would pay it to businesses as part of the retail price of things we buy, and businesses would then remit the tax to Uncle Sam.



A VAT is set at a fixed rate — say, 10 or 15 percent — added to the price of a good at every step of production, with a deduction allowed for the amount of VAT paid during earlier stages of production. The more steps there are in transforming raw materials into complex consumer goods, the higher the resulting consumer price as a result of those multiple layers of taxation.

Many countries have VATs, including Canada, Mexico, and the European Union. One might say that a VAT is an emblem signifying that a country's government consumes a large percentage of its GDP, for VATs seem to go hand-in-hand with big-budget nanny states."