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To: Les H who wrote (25089)	11/6/2004 5:25:33 AM
From: KyrosL	Respond to of 306849

I think a sales tax will be in addition to the income tax. It will be used to simplify and reduce the income tax. To be acceptable, the initial rate will be low (so it can't replace the income tax) and some essential goods and services, like food and medicine, will be excluded. Since many excluded essential goods and services are domestically produced, a VAT can be essentially a tariff on imported consumer goods -- the vast majority of which are made abroad -- without violating trade rules. This will make it palatable to both parties. A VAT will level the trade playing field with Europe. Europe has a hefty VAT, which, IMO, is one of the keys to their favorable trade balance and high savings rates.