Tsiantar, Dody, “Why the U.S. can learn from New Zealand when it comes to taxes,” Fortune, 04/13/10

“So who does it best? Tax experts and economists point to New Zealand, where a 12.5 percent goods and services tax applies uniformly to nearly everything with very limited exceptions-only rent paid for a private home, charitable contributions and interest earned are exempted. (The government offers clear details, too, on its website.)
‘In New Zealand, it works in a very pure form,’ says Eric Toder, an economist at the Tax Policy Center and a former consultant to the New Zealand Treasury. Toder analyzed the economic impacts of several different VAT tax models for the center, in this report. ‘The population likes it. People think it’s fair because it doesn’t exempt some folks and not others.’
Critics fear that an American VAT may invite the creation of an arbitrary morass of tax exemptions. Politicians will no doubt try to protect local businesses and pet causes by excluding them from being taxed. And once the tax is in place, raising it is easier than raising a typical tax because so many in the chain pick up little bits of the overall hike.”                                                                                   http://money.cnn.com/2010/04/13/news/economy/new_zealand_vat.fortune/