3 ms·
Possibly off-topic, but my guess is that one of the reasons why money was invented was that the good (or bad ) thing about barter is that there is no sales tax
by jaclaz 6y ago
Possibly off-topic, but my guess is that one of the reasons why money was invented was that the good (or bad ) thing about barter is that there is no sales tax or VAT involved.
Consider the Bob and Charli situation, in a hypothetical EU country, the 2 loafs of bread would become (say) 2.08 (as there is a lower VAT on some basic food, let's say 4%) and the chocolate bar would become 2.44 (as it is a non-basic item, subject to full 22% VAT).
I.e. in that exchange of 2 money units of goods would get the state some .52 money units if done through money and nothing through barter.