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I find the concept of "tax free" services interesting as a European. VAT is placed on everything and people are just fine with that. Would not come to my mind t

I find the concept of "tax free" services interesting as a European. VAT is placed on everything and people are just fine with that. Would not come to my mind to question that concept.

jsprogrammer 11y ago
You should question all concepts that you consider.
JoshTriplett 11y ago
VAT is universally applied to (most) things, though as I understand it there are still a fair many exceptions and special-cases (e.g. zero-rating). The US has far more one-off taxes on specific random things, like gasoline and phone service. Ostensibly to pay for related items, such as roads and phone subsidies respectively, but sometimes it's just a random tax in a particular area to raise revenue.
DanBC 11y ago
> VAT is placed on everything In England some items are zero rated, (most food, children's clothes, books etc) and other items have lower rates. > and people are just fine with that There's a pretty vigorous campaign to move tampons and pads to the zero rate.
- the_mitsuhiko 11y ago
  > In England some items are zero rated, (most food, children's clothes, books etc) and other items have lower rates. That does not exist in the EU any more. Only products that did not have VAT at the time of introduction of the VAT system can retain it. Austria has no VAT free items as an example. > There's a pretty vigorous campaign to move tampons and pads to the zero rate. Pointless campaign because it cannot be done. You cannot remove VAT under EU regulations from an item.
  - Symbiote 11y ago
    It's a pointless campaign because the tax on a year's worth of tampons is about 75p. Books, most food etc are still zero rated in the UK. It's fairer, VAT is a regressive tax, and this helps a little.
    - eru 11y ago
      Why not just give poor people money, instead of lowering taxes on specific things that are also consumed by rich people..
  - alextgordon 11y ago
    > Pointless campaign because it cannot be done. You cannot remove VAT under EU regulations from an item. There's a referendum coming up to do just that...
    - the_mitsuhiko 11y ago
      > There's a referendum coming up to do just that... And if they leave the EU they can do whatever they want. But we can also discuss a few other purely hypothetical situations.
      - _delirium 11y ago
        Realistically, probably not even then, since following the EU VAT rules is a condition of access to the Common Market free-trade zone. That's why Switzerland and Norway also implement them, despite not being EU members. It's possible the UK could pull out of even the Common Market, not only the EU, but so far even the "leave" campaigners are saying that won't happen.
mobilefriendly 11y ago
VAT is insidious because it is hidden in the overall cost of goods and services. It is important for transparency for people to see and understand what portion they pay is going to taxes.
- Symbiote 11y ago
  It is clearly written at the bottom of every receipt.
- the_mitsuhiko 11y ago
  > VAT is insidious because it is hidden in the overall cost of goods and services Erm, what? The VAT is clearly labelled on every product and not at all hidden. In fact, if you grab any receipt in Europe you will see the different VAT rates very clearly on the receipt. That's important anyways because in some cases you can claim it back (for instance company expenditures).
- stordoff 11y ago
  In the UK, most (all? Not sure) receipts will have the amount of VAT indicated (e.g. my Amazon orders list "Total before VAT", "VAT", and "Grand Total"). Pretty much everyone is aware of VAT AFAICT, and 20% of total gives you a reasonable estimate of what the VAT on an item is (bit of an over-estimate, and ignores items that have rates other than the default 20%, but generally good enough to get a reasonable idea).
toyg 11y ago
> people are just fine with [VAT] Er, not quite. I for one would rather see VAT disappear. It's a regressive tax, it hits the poor (and start-ups) disproportionately, and it's basically just a huge "get out of jail" card for lazy lawmakers who won't dare to tax the rich. Which is why it is so "popular" around elites of every country.
- zardo 11y ago
  Don't they tax luxury items at a higher rate? The appeal of a VAT is that you can incent economic expansion in one are over another, ie... Better baby food over swankier yachts.
  - alextgordon 11y ago
    Rich people don't spend all their money on consumption like poor people have to do. Their money goes into equities, houses, investments that appreciate over time.
- AnthonyMouse 11y ago
  If I didn't know better I would think there was a conspiracy by the rich to convince people that consumption taxes are regressive because they know they're the only way the rich can be made to pay their taxes. Think about someone who has a billion dollars. Not income, already in the bank. Without a consumption tax, they can spend all of it without paying any taxes. Now think about someone who has student loans or a mortgage (i.e. someone not rich enough to pay for it outright). With an income tax they have to pay income tax on the money they're using to pay back the loan principal. Switch to a consumption tax and they don't. So where does this idea that consumption taxes are regressive come from? The theory is supposed to be that the rich spend less of their income than the poor. First small problem, that's only true for the super rich. Someone making $120K/year is pretty well spending it all on a big house and a new car and sending their kids to college. It's the people who have a billion dollars and make ten million a year in interest who aren't spending anywhere near that much. But those same people also don't have anywhere near that much in "taxable" income because they have fancy accountants and the investments they own don't have definite values until sold, which they never are. So they can make a million dollars in interest without paying any tax, and then they can use a different million dollars in principal to spend on anything they like, also without paying any tax. But if we had a consumption tax on cars and yachts and airfare, they would be paying that. So which one is the regressive one?
briandear 11y ago
We aren't "fine with that." A 20% VAT in France on top of insane income taxes and social charges.. No wonder unemployment is up and growth is stagnant. It should come to mind to question the concept of taxing everything. But unfortunately, for many people it doesn't. Imagine the economic growth if VAT were eliminated but then Hollande might have to move into a smaller palace and the 60% of French workers who work for the state would have to take a two week vacation instead of a month.

I find the concept of "tax free" services interesting as a European. VAT is placed on everything and people are just fine with that. Would not come to my mind to question that concept.

jsprogrammer 11y ago

You should question all concepts that you consider.

JoshTriplett 11y ago

VAT is universally applied to (most) things, though as I understand it there are still a fair many exceptions and special-cases (e.g. zero-rating). The US has far more one-off taxes on specific random things, like gasoline and phone service. Ostensibly to pay for related items, such as roads and phone subsidies respectively, but sometimes it's just a random tax in a particular area to raise revenue.

DanBC 11y ago

> VAT is placed on everything In England some items are zero rated, (most food, children's clothes, books etc) and other items have lower rates. > and people are just fine with that There's a pretty vigorous campaign to move tampons and pads to the zero rate.

the_mitsuhiko 11y ago
> In England some items are zero rated, (most food, children's clothes, books etc) and other items have lower rates. That does not exist in the EU any more. Only products that did not have VAT at the time of introduction of the VAT system can retain it. Austria has no VAT free items as an example. > There's a pretty vigorous campaign to move tampons and pads to the zero rate. Pointless campaign because it cannot be done. You cannot remove VAT under EU regulations from an item.
- Symbiote 11y ago
  It's a pointless campaign because the tax on a year's worth of tampons is about 75p. Books, most food etc are still zero rated in the UK. It's fairer, VAT is a regressive tax, and this helps a little.
  - eru 11y ago
    Why not just give poor people money, instead of lowering taxes on specific things that are also consumed by rich people..
- alextgordon 11y ago
  > Pointless campaign because it cannot be done. You cannot remove VAT under EU regulations from an item. There's a referendum coming up to do just that...
  - the_mitsuhiko 11y ago
    > There's a referendum coming up to do just that... And if they leave the EU they can do whatever they want. But we can also discuss a few other purely hypothetical situations.
    - _delirium 11y ago
      Realistically, probably not even then, since following the EU VAT rules is a condition of access to the Common Market free-trade zone. That's why Switzerland and Norway also implement them, despite not being EU members. It's possible the UK could pull out of even the Common Market, not only the EU, but so far even the "leave" campaigners are saying that won't happen.

mobilefriendly 11y ago

VAT is insidious because it is hidden in the overall cost of goods and services. It is important for transparency for people to see and understand what portion they pay is going to taxes.

Symbiote 11y ago
It is clearly written at the bottom of every receipt.
the_mitsuhiko 11y ago
> VAT is insidious because it is hidden in the overall cost of goods and services Erm, what? The VAT is clearly labelled on every product and not at all hidden. In fact, if you grab any receipt in Europe you will see the different VAT rates very clearly on the receipt. That's important anyways because in some cases you can claim it back (for instance company expenditures).
stordoff 11y ago
In the UK, most (all? Not sure) receipts will have the amount of VAT indicated (e.g. my Amazon orders list "Total before VAT", "VAT", and "Grand Total"). Pretty much everyone is aware of VAT AFAICT, and 20% of total gives you a reasonable estimate of what the VAT on an item is (bit of an over-estimate, and ignores items that have rates other than the default 20%, but generally good enough to get a reasonable idea).

toyg 11y ago

> people are just fine with [VAT] Er, not quite. I for one would rather see VAT disappear. It's a regressive tax, it hits the poor (and start-ups) disproportionately, and it's basically just a huge "get out of jail" card for lazy lawmakers who won't dare to tax the rich. Which is why it is so "popular" around elites of every country.

zardo 11y ago
Don't they tax luxury items at a higher rate? The appeal of a VAT is that you can incent economic expansion in one are over another, ie... Better baby food over swankier yachts.
- alextgordon 11y ago
  Rich people don't spend all their money on consumption like poor people have to do. Their money goes into equities, houses, investments that appreciate over time.
AnthonyMouse 11y ago
If I didn't know better I would think there was a conspiracy by the rich to convince people that consumption taxes are regressive because they know they're the only way the rich can be made to pay their taxes. Think about someone who has a billion dollars. Not income, already in the bank. Without a consumption tax, they can spend all of it without paying any taxes. Now think about someone who has student loans or a mortgage (i.e. someone not rich enough to pay for it outright). With an income tax they have to pay income tax on the money they're using to pay back the loan principal. Switch to a consumption tax and they don't. So where does this idea that consumption taxes are regressive come from? The theory is supposed to be that the rich spend less of their income than the poor. First small problem, that's only true for the super rich. Someone making $120K/year is pretty well spending it all on a big house and a new car and sending their kids to college. It's the people who have a billion dollars and make ten million a year in interest who aren't spending anywhere near that much. But those same people also don't have anywhere near that much in "taxable" income because they have fancy accountants and the investments they own don't have definite values until sold, which they never are. So they can make a million dollars in interest without paying any tax, and then they can use a different million dollars in principal to spend on anything they like, also without paying any tax. But if we had a consumption tax on cars and yachts and airfare, they would be paying that. So which one is the regressive one?

briandear 11y ago

We aren't "fine with that." A 20% VAT in France on top of insane income taxes and social charges.. No wonder unemployment is up and growth is stagnant. It should come to mind to question the concept of taxing everything. But unfortunately, for many people it doesn't. Imagine the economic growth if VAT were eliminated but then Hollande might have to move into a smaller palace and the 60% of French workers who work for the state would have to take a two week vacation instead of a month.