George wrote in :

On 11/24/2011 7:52 AM, Ed Pawlowski wrote:


I recall something like that too. There have been different VATs
proposed too. Some of that type of tax sounds good to the uneducated
because they think the consumer will no longer pay the tax, but
businesses will instead. It all comes out in the cost of goods sold.
We should be more concerned about government spending.

The problem with a VAT is that is a great cover for weasel politicians
who don't want anyone to realize how badly they are doing their job.
As you noted many would simply think that the business is paying and
not them.

One of the real problems with instituting a VAT is that merchants,
anxious thata they may not recoup the taxes they'd have to pay, increase
their prices to cover any possible shortfall. That means there will be
instant 10% or higher inflation. At least that is what was experienced
in Holland upon instituting the VAT. (European VAT can go higher than
20% depending on the "luxury" status of the merchandise).

A tax that is totally obvious and applied in one place (example, no
other taxes except a 38% sales tax) is a great thing because it would
make people do a lot more thinking on election day.

Whom do you think will get hit by a 38% more than others? WHo will be
able to afford it best?


--
Best regards
Han
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