Reply #29: Fair Taxes and Sales Taxes are not VAT. [View All]

They apply once and only at retail level. VAT is far more insidious and helps to hide the true amount of tax paid.

Iron ore company sells iron ore to steel plant - VAT paid and now has raised effective price of iron.
The more expensive iron is made into steel and the steel is sold to Chevy - VAT paid and now has raised effective price of Steel.
Chevy uses steel to build a car (which is more expensive because of VAT on both iron & steel) and sells it to a Dealer - VAT has no been applied again.

You buy the car and pay VAT listed however you have also paid VAT on every intermediate step which isn't listed and is included in cost of product.

So not only are you paying taxes the price of the good has gone up too.

VAT is about the most regressive tax you could possibly imagine. The only thing more regressive would be a hypothetical "poor tax". If you make less than $50K you pay 20% "poor tax".