Did you know that many large countries utilize a national sales tax, or value ad

Question

Did you know that many large countries utilize a national sales tax, or value added tax, to raise revenues? What if, -in an effort to FIX THE ECONOMY, the U.S. decided to do this?

This week, you are tasked with exploring the proposition of implementing a national tax on consumption. As you work on your proposal, please be sure to answer the following questions:

What other countries are doing this and to what degree of success?

How would this work? What/who would and what/who would not be taxed?

Who wins (and to what extent)?

Who looses (and to what extent)?

Explanation / Answer

1) Japan is one country that has very high consumption tax, Japan from beginning did not believe in domestic demand as most of its goods are imported, They just taxed the goods that came in from abroad. Apart from this they also added VAT to almost all goods. This model is almost primary source of revenues for the government there.

2) The model is simple, Every counter in super market or shops will add VAT extra and simply share that tax with government. The other model is to tax goods directly in the factory, so if you ship X units of goods then you would have to pay certain amount or percentage as tax to government. Everyone would be taxed, Those who are not taxed might be illegit businesses who do not sell items legally ofcourse do not pay tax either.

3) No matter how much control the government has, There are still some businesses that cannot be regulated, They simply would not be taxed, Best example yard sale etc

4) Shops in the country would loose too much, There are international shopping festivals across world giving tax free shopping some shoppers who want to buy expensive stuff would just hop on a flight to buy them overseas.

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