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Originally Posted by frozennorth
I agree. It sure sounds like an oxymoron. Same with vat. There's no value added to the product.
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I believe tax is added to the product everytime value is added. So, the manufacturer, the distributor, then at retail. From Wikipedia:
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In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state. VAT was invented because very high sales taxes and tariffs encourage cheating and smuggling.
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Someone mentioned Obama wanting to have this... I don't know about that. But, I strongly support the FairTax... which is a national consumption tax to replace the income tax, but it is nothing like VAT... and the pre-bate is built in so it can't be called "regressive" although many people say it is.
BOb