Why is the VAT administratively superior to a retail sales tax? Q.Why is the VAT administratively superior to a retail sales tax? A.Retail sales taxes suffer from several enforcement problems. Most notably, the government has no record of transactions with which to verify retailers’ tax payments. In a value-added tax, the chain of crediting creates a natural audit trail, and the seller has more incentive to report the transaction and pay tax. Read more about Why is the VAT administratively superior to a retail sales tax?
What would the tax rate be under a national retail sales tax? Q.What would the tax rate be under a national retail sales tax? A.It depends on assumptions about the breadth of the tax base, tax evasion and avoidance, and the effects on economic growth. It also depends on how the tax rate is measured. Read more about What would the tax rate be under a national retail sales tax?
How are different consumption taxes related? Q.How are different consumption taxes related? A.A retail sales tax, value-added tax, the flat tax, and the X-tax are closely related. These taxes are contrasted with wage taxes. Read more about How are different consumption taxes related?