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If you raised VAT even more they would just pass on the cost and make a fuss that it's the governments fault everything is suddenly more expensive. Politically
by k-mcgrady 10y ago
If you raised VAT even more they would just pass on the cost and make a fuss that it's the governments fault everything is suddenly more expensive. Politically it wouldn't work. If there was a way to globally set the price of a good at one level (iPhone = $400) and then each country could add tax after that so it's clear the company isn't passing the price on to the consumer in various countries with higher sales tax/VAT it might work well.
- eru 10y agoThere's a whole theory about which taxes economic actors can get away with passing on, and which they have to bear. See https://en.wikipedia.org/wiki/Tax_incidence https://en.wikipedia.org/wiki/Tax_incidence It's pretty intriguing, and doesn't align very well with our intuition. As far as I can tell, your hypothesis about the impact of VAT is not really supported by that.