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- Though the VAT theoretically spreads the tax burden on the added value of a good as it moves through the supply chain from raw material to the final product, in practice, the increased costs are typically passed along to the consumer. Pros Closes tax loopholes Provides incentive to earn Stable revenue source Cons Creates higher business costswww.investopedia.com/terms/v/valueaddedtax.asp
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The Pros and Cons of a Value Added Tax (VAT) - Tax Foundation
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