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>A Ford car exported from the US to Germany must be priced after paying US corporate tax (21% federal + state taxes) >A BMW exported from Germany to the US get

>A Ford car exported from the US to Germany must be priced after paying US corporate tax (21% federal + state taxes) >A BMW exported from Germany to the US gets a full VAT refund (~19% in Germany), making it tax-free on export Does US tax exports on turnover instead of income now? Does BMW not pay corporate income taxes? Are you being dense on purpose?

firesteelrain 2y ago
No, the US does not tax exports on turnover. US corporate tax is on net income (profit), not on revenue. Ford's export price still carries the cost of US corporate tax You assume the argument is that BMW doesn’t pay corporate tax but that is not the point. You assume the US is taxing exports unfairly. It isn’t, but it also doesn’t provide tax relief like VAT systems do. You are ignoring the fact that VAT refunds lower the export price for BMW, but Ford gets no equivalent tax break. Even though both BMW and Ford pay corporate taxes, BMW’s exports are tax-free because VAT is refunded. The real issue is structural tax asymmetry. The EU removes tax burdens from exports (via VAT refunds) and US does not because it has no such system. This makes US exports less competitive in VAT countries like Germany. The entire system makes for a trade imbalance for US exporters to the EU but there is no fair equivalence in EU hence Trump’s actions and remarks.
- Muromec 2y ago
  >The EU removes tax burdens from exports (via VAT refunds) and US does not because it has no such system. US didn't collect the tax in the first place, so there is no burden to relieve the company from. Refunding tax on exports makes it symmetric, otherwise EU would tax exports that US doesn't. I don't get why you bring up corporate taxes here at all, as they are present in both situation and are not refunded. I doesn't sound like you are arguing in a good faith to me. >This makes US exports less competitive in VAT countries like Germany. No it doesn't. Both imported and locally produced goods will have the same tax applied to them. Both local manufacturers and US companies have to price in their corporate taxes. Nobody pays the VAT except the end consumer in the end.
  - firesteelrain 2y ago
    US collects tax through the entire process and at the point of sale to the consumer. EU refunds the entire VAT so on that point you are wrong. EU exporters have a tax as advantaged export. This is mostly because the US does not have a VAT system.

firesteelrain 2y ago

No, the US does not tax exports on turnover. US corporate tax is on net income (profit), not on revenue. Ford's export price still carries the cost of US corporate tax You assume the argument is that BMW doesn’t pay corporate tax but that is not the point. You assume the US is taxing exports unfairly. It isn’t, but it also doesn’t provide tax relief like VAT systems do. You are ignoring the fact that VAT refunds lower the export price for BMW, but Ford gets no equivalent tax break. Even though both BMW and Ford pay corporate taxes, BMW’s exports are tax-free because VAT is refunded. The real issue is structural tax asymmetry. The EU removes tax burdens from exports (via VAT refunds) and US does not because it has no such system. This makes US exports less competitive in VAT countries like Germany. The entire system makes for a trade imbalance for US exporters to the EU but there is no fair equivalence in EU hence Trump’s actions and remarks.

Muromec 2y ago
>The EU removes tax burdens from exports (via VAT refunds) and US does not because it has no such system. US didn't collect the tax in the first place, so there is no burden to relieve the company from. Refunding tax on exports makes it symmetric, otherwise EU would tax exports that US doesn't. I don't get why you bring up corporate taxes here at all, as they are present in both situation and are not refunded. I doesn't sound like you are arguing in a good faith to me. >This makes US exports less competitive in VAT countries like Germany. No it doesn't. Both imported and locally produced goods will have the same tax applied to them. Both local manufacturers and US companies have to price in their corporate taxes. Nobody pays the VAT except the end consumer in the end.
- firesteelrain 2y ago
  US collects tax through the entire process and at the point of sale to the consumer. EU refunds the entire VAT so on that point you are wrong. EU exporters have a tax as advantaged export. This is mostly because the US does not have a VAT system.