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I'm not sure if you oppose sale tax only or also VAT. Both are regressive but VAT, while more complex, is based on taxing the added value so it is collected alo
by DomreiRoam 8y ago
I'm not sure if you oppose sale tax only or also VAT. Both are regressive but VAT, while more complex, is based on taxing the added value so it is collected along the supply chain. In the supply chain everybody is charging VAT on their sales invoice and deduce VAT on their purchase invoice. BTW, you must pay to the tax authority the VAT your charged you client even if he/she didn't pay you.
https://tax.thomsonreuters.com/blog/onesource/sales-and-use-tax/difference-sales-tax-vat-2/ https://tax.thomsonreuters.com/blog/onesource/sales-and-use-...
- ucaetano 8y agoI don't oppose a production/consumption tax, it is necessary given the intricacies of the world, but we need to keep in mind that it is regressive, and will impact the poor more, when making decisions about taxation. But between VAT and sales tax, I strongly oppose a pure sales tax, although I would be ok with VAT charging a final tax which is allocated to the consumer location (vs. the location of the business). Pure VAT: taxed where value is generated. Pure Sales: taxed where the consumer is based. Mixed VAT-Sales: mostly taxed where the value is generated, plus where the consumer is based. The mixed VAT-Sales model would generate a better allocation of tax funds across the entire supply chain, all the way to the consumer.
- DomreiRoam 8y agoin theory, when all transactions happens between participants on a free market, then the real value added by a participant tend to be their sale price minus all their cost. I think it's only when you have non perfect market condition (like monopoly, monopsony, captive company) that the real added value is not visible and where your idea of mixed taxes is needed. Do you think it make sense or do you something other in your mind?