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Its a good idea but it would still be too high at 20% - 16% should be the target (the legal minimum). The reason North America, Australia, China are such attra

Its a good idea but it would still be too high at 20% - 16% should be the target (the legal minimum). The reason North America, Australia, China are such attractive markets to sell into is because of their low sales tax rates. When sales taxes are high, it artificially increases the price of a product such that only the biggest and most established companies and product categories can survive. The American approach of taxing land/property heavily, and consumption minimally, is much more successful at actually encouraging innovation. Just use pollution, plastic, and obesity taxes to target unsustainable or unhealthy consumption.

bildung 6y ago
> The reason North America, Australia, China are such attractive markets to sell into is because of their low sales tax rates. This is obviously wrong, each of these markets has a) vastly different tax rates (e.g. tax revenue per GDP per capita in China is 50% higher than that of the US) and taxation mechanics, and b) vastly different reasons for their respective releveance (i.e. industrialization in China, but raw materials in Australia).
toyg 6y ago
I agree with most of your argument except this: > The reason North America, Australia, China are such attractive markets to sell into is because of their low sales tax rates. Not really. The attractiveness is the ratio of population times buying power over required cost and effort: (P x B) / (C + E). In those markets, in most sectors, you do your paperwork once and that's it, you get access to hundreds of millions of customers, so overall the Effort factor ends up being very low. The EU has probably the highest PxB factor, but it's bogged down by fragmentation both at the cultural level (dozens of languages) and at the bureaucratic level (dozens of very different legal and taxation systems), making E much higher than it could be. Cultural differences are not going away anytime soon, but unnecessary technical ones should be slowly eroded - which is what the EU project has largely been about, under the banner of "harmonization". So the problem is not necessarily the level of taxation. If the club is really really good once inside, businesses will have no problem paying a high "entrance fee" and following a strict "dress code". But if they also have to pay a different fee every time they enter a different room and follow a different dress code, then they will probably not come back.

bildung 6y ago

> The reason North America, Australia, China are such attractive markets to sell into is because of their low sales tax rates. This is obviously wrong, each of these markets has a) vastly different tax rates (e.g. tax revenue per GDP per capita in China is 50% higher than that of the US) and taxation mechanics, and b) vastly different reasons for their respective releveance (i.e. industrialization in China, but raw materials in Australia).

toyg 6y ago

I agree with most of your argument except this: > The reason North America, Australia, China are such attractive markets to sell into is because of their low sales tax rates. Not really. The attractiveness is the ratio of population times buying power over required cost and effort: (P x B) / (C + E). In those markets, in most sectors, you do your paperwork once and that's it, you get access to hundreds of millions of customers, so overall the Effort factor ends up being very low. The EU has probably the highest PxB factor, but it's bogged down by fragmentation both at the cultural level (dozens of languages) and at the bureaucratic level (dozens of very different legal and taxation systems), making E much higher than it could be. Cultural differences are not going away anytime soon, but unnecessary technical ones should be slowly eroded - which is what the EU project has largely been about, under the banner of "harmonization". So the problem is not necessarily the level of taxation. If the club is really really good once inside, businesses will have no problem paying a high "entrance fee" and following a strict "dress code". But if they also have to pay a different fee every time they enter a different room and follow a different dress code, then they will probably not come back.