MudMan

That is true with or without VAT. VAT isn’t paid by the buyer, either. It’s the seller that makes the VAT payment.

So sure, the rich asshole may try to write off the Ferrari in their business tax, along with all the other loopholes (good luck with that, too-- I’ve gotten audited for much less), but 20% of that cost still went into taxes because the dealership paid in their VAT every three months like a good boy. That’s the entire point.

VAT dodging is an art and a science for contractors of all stripes and other grey economy actors, but if you’re a standing business like, say, a former Fiat subsidiary with a large worldwide business headquartered in Italy, VAT is the one tax you don’t get to mess with because it’s baked into every invoice.

No, you can only tax the rich so much because a lot of the money is laundered through internationally sanctioned loopholes. There was a plan for that, but then some morons elected Trump so now that’s probably not happening.

But sales tax still works for that, since if you want to buy a Ferrari we’re keeping 20% automatically at the point of sale.

And since rich people tend to spend more money than poor people, sales tax is more regressive than other taxes, but not as much as one would think.