4 ms·

$6/gallon gasoline sounds expensive to me. I'd much rather live here on a moderate salary. Enjoy paying VAT taxes!

• vidarh 9y ago
  VAT adds up to a very low percentage of what a typical family spends, as firstly, most people only spends a small proportion of their salary on things that VAT are due on. E.g. if you pay 25% in tax + national insurance, then your net salary is 75% of your gross. If you spend 1/3 of that on mortage/rent, you're left with half of your gross salary. This leaves you with VAT adding a theoretical maximum of 10 percentage points to your taxes. But of course, in reality you have a bunch of other costs that VAT aren't charged on, and a number of essential goods such as most food are zero rated, and a number of additional goods are charged at reduced rates. Last time I did the maths for myself (earning well beyond average), despite the headline VAT rate for the UK of 20%, I paid less than 4% of my salary towards VAT. Overall my tax level was comparable to e.g. California (and if factoring in health insurance etc., California would have been much more expensive if I wanted to ensure equivalent coverage). Your mileage will vary depending on what you spend your money on. Now, if you spend a lot of your income on gasoline, you have a point - it will drive up the taxes you pay a lot. And also, there certainly are US states that would be cheaper. But a comparison like that is pretty meaningless without factoring in cost of living and salary levels as well.