June 24th, 2009

SoundBytes 195: Are You Ready for a VAT Tax?

Posted in  Economic Growth  Government  SoundBytes podcasts  Tax 
Author: SoundBytes || Location: Lewisville, Texas, USA

Are You Ready for a VAT Tax? The Institute for Policy Innovation’s Dr. Merrill Matthews says Congress is looking for more money.

The Washington Post reports that support is growing for a Value Added Tax, or VAT tax, to pay for Congress’s massive spending projects, like health care reform.

A VAT tax is similar to a sales tax, only the tax is charged at each level of production. So a car manufacturer would pay a tax on all of the raw materials and parts it buys to make cars. And then pass those multiple layers of taxes on to consumers in the form of higher car prices.

Politicians love a VAT tax because voters can’t tell how much they’re being taxed, or when the tax is increased. They only see much higher prices.

That let’s politicians criticize those “greedy” businesses for charging too much, while it’s the government that’s raking in the extra bucks.