re: #467 subsailor68

Hi Spare! A sales tax isn’t really invisible, as it shows up on the bottom of your receipt. The VAT, on the other hand, is arguably at least partly invisible as it is applied at each level of the production process.

So, for example, you buy a pencil. The VAT on the production of the eraser at the end of your pencil can be raised, and it could be considered “invisible” as it doesn’t show up anywhere (well, other than as an overall increase in the cost of your pencil).

That’s why many folks are uneasy about VAT, as it’s very tempting for politicians to increase that portion of the VAT not clearly visible to the public.

As you may be, we have a VAT in Canada called the HST (Harmonized Sales Tax) or GST (Goods and Services Tax). The tax is designed ultimately to tax the value added to an item only once, and this is accomplished by giving input credits to the producers which they can deduct from their remittances.
However in the case of consumption for personal use there are no input credits, and the full tax is paid on the full price. It is an extremely visible tax which, in the Provice of Ontario, will be 13% as of July 1, 2010, and it is shown as a separate item on the sale receipt.
In fact, the VAT is extremely visible - it’s right in the consumer’s face.
Even at the gas pump the amount of the VAT per litre is posted right there for all to see.
In order to ameliorate the regressive nature of the VAT, the government provides partial GST rebates, on an income-based sliding scale, to all income tax return filers.