Value Added Tax, (i.e. VAT) a particular and superior sales tax method.

Aug 2010
211
40
Cliffside Park, NJ
#1
“Value Added Tax”, (i.e. VAT) is a particular and superior method of administrating a sales tax.

Unlike prior (conventional) sales tax methods, VAT never taxes any prior levied taxes carried forward from prior sales transactions. Within a chain of sales links, the tax levied upon the purchaser within any transaction link is government’s total revenue realized up to that particular point within the chain of transactions.

Unlike other sales tax methods, enterprises reduce their amounts of VAT collected by the VATs they’ve paid, and only pass the difference on to the government. There is little advantage or reason for intermediate purchasers to request the seller not record a sales transaction.
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VAT’s particularly suitable for global trade.
Governments waive taxes upon their exports, but they can only do so to the extent that they’re able to identify specific amounts of taxes levied upon the products within each of their export shipments.

VAT levied within the export sales’ transaction are the entire VAT (from all prior and the export link within the chain of sales transactions that can be identified and attributed to a shipment of exported goods.
The prices of exports from VAT nations are reduced by the greatest amounts.

In the case of a non-VAT nation, only sales taxes from the export transaction itself can be identified. The prices of exports are reduced by lesser amounts.

Other than sales taxes of any kind, there are few if any other taxes that can e identified and be attributed to the products within an export shipment.

[Excerpted from
http://www.brookings.edu/papers/2010/0722_vat_gale.aspx “.

(Brookings Institute is widely regarded as a conservative think tank).

The key distinction is that VATs are collected at each stage of production, whereas retail sales taxes are collected only at point of final sale. As a result, the VAT is easier to enforce and is widely regarded as having a superior administrative structure to a retail sales tax”.

Respectfully, Supposn
 

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