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i know its value added tax but how is it specifically different from a sales tax. in the us model, since states have a different level of sovereignty compared t

i know its value added tax but how is it specifically different from a sales tax. in the us model, since states have a different level of sovereignty compared to the federal government, it is at least somewhat internally consistent that states would have a seperate layer of revenue generation compared to the federal govt revenue generation derived from income. citizens are taxed on the basis of income/capital gains, and transactions for goods are taxes on a sales/tx level. does vat refer in some way to the incremental "value addition" in a marx das kapital sense or something else?

esotericn 8y ago
In the UK, as a business, you can reclaim VAT spent on inputs if you charge it on outputs. For example: I buy a Foo for 1200 GBP, 1000 GBP plus 200 GBP VAT I wiggle it around a bit, improving its' value I sell a WigglyFoo for 1320 GBP, 1100 GBP plus 220 GBP VAT I receive 1320 GBP from the customer, but have to pay 220 of that to the government. So my revenue is 1100 GBP. Subtracting costs I'm at -100 GBP. If you reclaim the 200 in VAT (which really, you should have an invoice for) then you actually make the 100 GBP profit you should get.