Federal Taxes

The European Union gets most of their revenue from the Value Added Tax System, whereas most of our tax revenue comes from income tax. The Value Added Tax System works in a way in which everything that is sold has a sales tax applied to it, resulting in a tax of about 17% by the time the consumer purchases the product. Compare this to our income tax system. Who benefits in each of these systems? Think about this in terms of government expenses, merchants, and individuals.