Gerhard Fiedler wrote:
> Are there any states that have a VAT? Is this even possible, or can
> states only have a sales tax?

I don't think any state has VAT, but I don't a state would be federally
prohibited from that.  Anything the constitution doesn't specifically
reserve as rights and powers for the federal government become rights and
powers of the states.  Of course there is a lot of wrangling and argument
about what exactly has been granted to the federal government.  Ultimately
the Supreme Court has to step in and tell everyone what the constitution
says.

In practise, I think it would be very very difficult for a state to pass a
VAT tax.  First the people would be pissed and the legislators would rightl=
y
fear for their jobs.  Second, that would be a major logistical problem for
that state since things move so easily between states, and multi-state
companies could use some creative accounting.  It would also be seen as a
business-unfriendly state, making it hard to attract new manufacturing
plants or to keep existing ones.


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