From: golchowy@alchemy.chem.utoronto.ca (Gerald Olchowy)
Subject: Re: National Sales Tax, The Movie
Organization: University of Toronto Chemistry Department
Lines: 27

In article <C5M2F9.GEB@news.iastate.edu> atboyken@iastate.edu (Aaron T Boyken) writes:
>
>If the VAT will be done in the same way that state and local sales 
>taxes are done, nothing will be on the sticker.  The cleark ringing
>up your purchase (gum, gas, car, etc.) will hit a button to add 
>another 5% on top of the state and local sales taxes (and that won't
>include any of the VAT from previous levels of sales).
>

There is no need to include the VAT from previous levels because
the VAT is a "difference" tax...if the VAT is X%, than the amount
of tax the government receives through all the levels is X% of
the purchase price of the end consumer.  At the intervening levels,
only the difference between the VAT paid out and the VAT received
is remitted to the government.

>Here's a question:  what if, instead of a true VAT, the federal 
>government imposed a sales tax of say 2-3%?  The tax would only
>be paid on retail sales (thus not building up at all levels of
>production costs that are just passed on to consumers anyway),
>and would only go to reducing the deficit.  (I know that this 
>would never happen, but it seems a lot more palettable than
>a VAT).

A VAT is infinitely preferable to a retail sails tax...

Gerald
