If I must, I will cover the basics of economics involving ad valorem taxation.
VAT in its essence is an ad valorem consumption tax of regressive character. It does not target income or savings, but consumption.
Even though a uniform tax rate would make it seem that it taxes everyone equally, it does not. Since it taxes consumption only, those with higher consumption percentage relative to their total income pay relatively more taxes than those with lower consumption to income ratio.
Now, the relationship between income, consumption and savings. Each individual distributes his income relative to personal needs. There is a consumption minimum that must be satisfied, the rest of the income can be distributed on additional consumption and luxuries or can be conserved into savings. How does this affect households of different income levels? Since a minimum consumption level must be satisfied, households of lower income have a much higher percentage of consumption compared to those of higher income level. They simply do not have excess income to save. This causes that lower income households pay relatively more taxes through ad valorem taxation than higher income households. There is no VAT on savings. And any VAT as such is a regressive tax that places greater pressure on lower income households than those of higher income.
Is a 0% tax rate a hand-out? No. Each and every item in this category applies equally to every member of Eutopian society regardless of their income. The goal is simply to make these products more accessible and to stimulate their consumption. These are investments. Investment in diapers ensures that the aging of Eutopian work force pool will take a slower pace. Investment in books ensures that future Eutopian work force pool will be highly educated, skilled and able to compete on the world market. Investment in medicines and medical services ensures that Eutopian populace will be healthier and more productive. Regardless of income, all these categories ensure greater economic growth and prosperity of Eutopia. Each in its own way is an investment in this great nations future.
Is a 25% tax rate a rich mans tax? No. As an opposite of products in the 0% tax class, these products represents a squandering of national assets. This tax rate targets consumption which does not lead to generation of wealth, but is in some ways detrimental to Eutopian economic stability. Will this target only the rich? No. It will target anyone who buys these things regardless of income? Will the rich always pay these taxes? No. I see no definite relation between how much a person earns and how much they spend. Some might say that the more one earns the less he is willing to pay... But the important question is how do these things affect Eutopian economy. Luxurious cars and yachts are import goods. By penalizing these products we may motivate our citizens to focus their funds into either savings or alternative domestic production without violating WTO or CAFTA principles. Luxury homes... one might argue that real estate prices rise and and this accumulates wealth, but with Eutopian real estate prices, a 600,000Đ is more than enough for quite a luxurious villa. Sums above that are only squandering resources and room. Eccentric estates susceptible to loss of value. As the tax states, it only defines homes, not real estate used in economic reproduction. A family farm of 1,000,000Đ is not subject to this tax, nor a family hotel. Only purchase of homes above that price.
Firearms, jewelry, furs... while nothing could be gained by forbiding the sales of firearms and furs since a black market would soon compensate demand, a higher tax rate might stimulate our citizens to spend their money on something else. Does a gun kill or a person shooting the gun? This is not the time to discuss that subject. What I am sure is that a higher tax rate will raise the prices on firearms and lower demand for the same and increase responsability involving firearms. As for furs I have no intention about getting into moral debates... with Eutopias moderate oceanic climate most fur is imported and if that import can be compensated with domestic clothing, all the better for Eutopian trade balance. Wear a leather coat instead of a fur one, as long as its Eutopian leather.
And finaly, vanity... if it's cheap it's not worth having... again I see no reason why not to tax the vain. The main effect desired is to reduce demand for such services and remove the burden on Eutopian medical system.
I believe I have covered every aspect, and still fail to see any ground on which VATA as an attempt to rob the rich. The VATA targets everyone according to their consumption habits. It favors responsible and sound economic consumption and penalizes irresponsible and/or eccentric consumption. Every individual determines how much they will contribute through taxes according to the economic responsability of their consumption. Invest and save and you will be rewarded, squander and you will be penalized. Everyone has a choice, income level has nothing to do with it.