Income Tax is like a VAT

Michele Bachmann accused Herman Cain of instituting a Value Added Tax with the 9% corporate income tax in the 9-9-9 plan.

In the same breath, she said she'd play with the current income tax code, keep the regulations and leave the payroll tax in place.

Herman Cain wants to simplify the income tax code before completely eradicating it and replacing it with the FairTax. From the beginning with 9-9-9, it means NO income taxes or payroll taxes, NO investment taxes or capital gains taxes, NO estate taxes and fewer embedded taxes under 9-9-9 then NO embedded taxes.

So, what's a VAT tax? A European-style Value Added Tax is a federal tax on every stage of production. It's end effect is similar to our income and payroll taxes because the tax is built into the cost of the end purchase (trickle down).

See, every business needs to make a profit. When their expenses go up (inventory, rent, energy, insurance, minimum wage, taxes...), they must somehow recoup the lost profit in order to stay in business. Most businesses already operate on a shoe-string budget, especially in this economic environment, so "trimming the fat" is not an option.

The question is: does Michele Bachmann think the current income tax is better than 9-9-9 or the FairTax?