Tuesday, October 18, 2011

Sales Tax is not a VAT

Oh, and by the way, a sales tax is not a Value Added Tax like in Europe. A VAT is levied at every stage of production (just a few or hundreds for some products like a house). The VAT rolls downhill and gets larger with each business that touches the product, a lot like the American income and payroll taxes.

A sales tax is levied one time at the end purchase. A sales tax is a certain percent of a dollar spent at the final sale, not a culmination of taxes at every stage of production.

No comments:

Post a Comment