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The reason that most high sales tax places have a VAT is that a VAT gives the seller an incentive to report the sale since he will get a rebate on the VAT the seller paid.

I will discuss this with you in more detail if you wish.

How about this for a sale?

I want to sell you a desk for $1,000. You could pay me and we would owe sales tax.


I could lend you $2,027,000 at 18% for 1 day. Since I don't really trust you I won't actually let you touch the cash. In any event, the interest is $1,000. So, instead of 'selling' you the desk, I give you the desk cause I am a nice lady. You get your desk, I get your $1,000 and the tax people get NOTHING.


You lend me $1,000 at 4% a year interest. The loan capitalizes the interest and calls for a single payment of $1.079E+17 in the year 3001.

I get my $1,000. You get your desk. The tax people get NOTHING

Do you still think it is easy to define a sale?
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