1) I would assume your administration costs would be similar to what states currently incur administering sales taxes. In fact, the federal government would probably have to contract with the states to remit the VAT to the Feds.

2) Don’t know how you handle this without exempting certain items like food and medicine. For what its worth, all of the columns I’ve read that were written by Bartlett addressing the VAT assumed that lower income people should be paying more taxes than they are now.

3) Yes, ultimately the consumer pays the tax. The point is that the VAT is effectively only paid once for a particular good or service. One of the problems with a retail sales tax, especially if you have a sales tax on services (legal fees, accounting fees, etc.), is that you can end up taxing intermediate goods and services rather than final goods and services. The problem is, that this can lead to a pyramiding of taxes (i.e. the same good or service may be taxed more than once).

4) Marxst1, the way I see it, the producer collects and remits the tax. He or she does not pay it, in this case ( a VAT) the consumer does. However, I would argue something similar (with some qualifications) about corporate income taxes.

Hope this helps. I will try to post some links later on the VAT.

1) Administration costs for tracking a VAT tax seem like a nightmare.
2) How do you balance the tax so it doesn’t become “regressive” costing a lot more for lower priced goods than higher priced goods which would end up putting the tax penalty more on the poor.
3) In all examples I’ve found, you still have the same amount of tax paid (and really it ends up being paid by the consumer either way since the “final” price of an item would be the same) so what would be so beneficial about it?
4) If it does decrease the tax burden at the production level (pre consumer) like they say, where do we recoup that money in this system? In other words, won’t you just end up having to increase the overall tax rate all the way down the chain?

Any help would be appreciated.