Thanks for that example, I believe it proves my point that there's no point in doing that. In your example, the retail price of DVD player is less because the corp. didn't have to pay any taxes. However, the actual amount paid is baiscally the same (by adding a 35% VAT). Now this 35% VAT ONLY accounts for the amount of money that used to be collected directly from corporations. It doesn't touch the income tax money. It also would only apply to VAT taxable items. Therefore it would need to be even higher to cover the income taxes that used to be collected from corps that make non-VAT taxable items.

In order to completely switch to VAT we'd also have increase the VAT more to cover that money. Also, since most people spend most of their money on non-VAT taxable items we have to make it even higher. Before you know it, we are charging over 70% on VAT items.

The problem with the arguement that income tax discourages working is the fact that you need to work if you want a house, food, electricity, etc. You don't *need* to see movies and buy shit. Sure, there is welfare but that barely gives you enough to live in a shithole. Consumption is a choice that can be easily reduced.

Furthermore, what about buying a car? Say there is this $20k car. With a 70% VAT on there it's up to 34k. You have to pay interest on the VAT! Fuck that.

I agree. Government is way to big.
I wonder how we Americans would react if we really knew how much taxes we pay. Imagine if there was only a sales tax and that loaf of bread was marked 25 cents but when you got to the checkout counter they added $1.80 in taxes instead of taking it out at every step of production like we do now. (figures are for illustration purposes, I still don't know how much of the price is due to taxes, I'm guessing it's a large percentage)

I do know their is a weakness to my system. However, our current system allows for people to get away with not paying taxes, and it is not as fair. Our current system estimates 20-25% will cheat or not pay all they 'owe.'

I want to revise my system a little. Dependancy rates would be regressive. One dependant would get about an additional $10,000 tax free, instead of $13,000. A second dependant would be an additional $8,000 or so. So a family of three would get $31,000 of their income to be left un-taxed instead of $36,000.

As for a VAT or sales tax, I like it because people only pay when they spend, hopefully encouraging saving, but unfortunately low income households are punished because it is harder for them to save. One solution might be to not tax necessity items like food.

So how much of other people's money should wind up in your pocket before things are "fair?"

If you're talking about a "good deal," how about the EIC?

The illegal Guatemalans that used to live near me had about eight people in the same house receiving government assistance.

That beats the hell out of the deal you think is so sweet.