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Since a VAT is a consumption tax, it is essentially regressive; poor people are hit harder.
by astazangasta 10y ago
Since a VAT is a consumption tax, it is essentially regressive; poor people are hit harder.
- zeveb 10y agoThat could, though, be balanced with e.g. basic income.
- deleted 10y ago[deleted]
- todd8 10y agoCorporate taxes have a similar (although not identical) impact; the corporate taxes end up costing three different groups: shareholders due to reduced dividends, employees due to reduced wages and bonuses, and consumers due to increased prices for company's products. Thus corporate taxes tend to have an impact across the entire population, somewhat like VATs, see [1]. I feel like this is why they are popular, it sounds like you are taxing someone else to most people. [1] http://www.pgpf.org/sites/default/files/0102_tax-rates-full.gif http://www.pgpf.org/sites/default/files/0102_tax-rates-full....
- fu9ar 10y agoThat is because the problem is the ideology of Capitalism working within a consumer market economy.
- marcosdumay 10y agoIt is really? Investment always lead to some kind of consumption, that is taxed just like plain consumption. I've never seen this taken into account when calculating VATs regressiveness. Although it can't really be progressive, so the real question here is how regressive is the tax? Does it win over income taxes, that are also regressive?
- Broken_Hippo 10y agoThat is true, but that can be worked around to an extent. I mean, if you know food has VAT, you simply increase the amount of money you give for food to cover that tax. And son on: Adjust poverty levels to show that. You can exclude some things, improve public transportation, and other things to lessen the burden. Of course, the reality is that it is harder to do in some political cultures - the US, for example.