| > It's just a percentage. You don't need to be a business to understand that. What you have to understand is the process to claim it back, i.e. the fact that businesses and business owners effectively don't pay it. > the actual costs are the ones that consumers want to see Of course, which is why VAT is so clever: effectively, it's so easy to ignore that most people do just that and don't realise that they're paying a tax that businesses and rich people simply don't pay. It's the best type of hiding: in plain sight. The American approach is more annoying, yes, but it's also more transparent: the consumer is forced to feel the full weight of tax, and can perceive how businesses are completely unaffected by it. > 'flat rate' or 'proportional tax' is _not_ regressive In practice, it is. If I pay the exact absolute amount of tax on a transaction for the same good, regardless of my wealth, then in practice it's regressive because it will weight more on the less wealthy. A flat rate is less regressive when transactions differ (the same percentage of a bigger transaction will result in more tax), but this is not the case with VAT. As I said, the theory that this is compensated by rich people buying more expensive goods is just that, a theory; in practice, this does not happen n any significant scale. > End customers have no VAT to claim back. [...] Now if you are running a business Of course. My point is, most wealthy people will be running businesses, and hence will not pay tax on pretty much anything except the most outrageous items. Most of those Porsches and BMWs you see on the streets of London are not bought by individuals, but rather by (shell) companies such people run. They're still managed exactly like they were an individual's private property, but on paper they're not and so there won't be any VAT paid by such "end customers". > If you are a 'n00b' employee then you pay it. yup. And that's my point: it's a tax on n00b employees who cannot afford good accountants and shell companies. They're the only ones who really pay it all. |