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You spent hours equating US corporate taxes to VAT, not examples that had any connection to reality. When it was pointed out that you were confused, you did not

by jsnell 2y ago

You spent hours equating US corporate taxes to VAT, not examples that had any connection to reality. When it was pointed out that you were confused, you did not actually engage with those rebuttals, but just copy-pasted the same nonsense again. So I think it's pretty obvious who here can't read. In your new example, Caterpillar pays state/local taxes for their sales to the US, corpirate taxes to the US, and no VAT to the EU. Liebherr pays state/local taxes for their sales to the US, corporate taxes to the EU, and no VAT to the EU. Where is the imbalance? There's no export subsidy here, hidden or otherwise. Everyone is on a level playing field. You could do the same exercise on US exports to EU vs. domestic production in the EU, and it'd likewise show that there are no artifical barriers to imports to the EU > This lowers Liebherr’s export price by 19%. No, it really doesn't. The export price is exactly at the level it would be if there were no VAT at all. > Liebherr sells the bulldozer tax-free in the US. Tax-free other than all the taxes they paid.

firesteelrain 2y ago
I get it - you don’t understand how this works. One more time You are correct that that all companies pay corporate taxes. We have established that. VAT is already baked into the cost of production at every step in a VAT-based economy. If VAT were not refunded, that 19% tax cost would be included in the price, making the bulldozer more expensive abroad. Technically, VAT refunds are not an "export subsidy" in the traditional sense (where the government directly pays companies to export). BUT, the effect is the same as a subsidy and it removes tax costs from exports, giving VAT-based economies a competitive advantage. The US does not provide tax relief for its exporters and does not impose VAT on imports. "Everyone is on a level playing field" Wrong. The US does not refund taxes on exports, while VAT countries do When you are ready to understand that part let me know.
- mopsi 2y ago
  > The US does not provide tax relief for its exporters and does not impose VAT on imports. It does. Exports from the US are exempt from sales tax, the same way others exempt their exports from VAT. Neither side pays domestic consumption taxes on exported products, and both sides charge consumption taxes equally on all domestic consumption, no matter where the products were produced. Both American and European products cost a little more in Germany due to 19% VAT, and both cost a little less in the US due to 7% sales tax. Nobody gets a free ride.
  - firesteelrain 2y ago
    US is not exempt because it accumulates throughout the entire process whereas VAT is refunded. US bakes the sales tax on acquired parts from their suppliers into the cost of their exported products whereas the EU exporters have an advantage. It’s a structural problem with the US tax system in this case.
    - mopsi 2y ago
      Raw materials like steel used in bulldozers, as well as machinery and supplies, are often exempt from sales tax, especially when the finished products are exported. Nevertheless, in some scenarios, sales tax can indeed cascade and be charged multiple times during the manufacturing process, so even if it's not charged at the final step, there's still a component of it in the final price to the buyer. This is not a hidden tariff by other countries against US products. Other countries have no control over this. The US government simply sucks at taxation because it has not transitioned to VAT, and products cost more to manufacture than they would have under a better tax system.
      - firesteelrain 2y ago
        It’s your opinion that it’s better. Not everyone agrees. Tariffs are legal under US law to apply. EU also needs to step up their military contributions before Russia bulldozes them.
        mopsi 2y ago
        I'm far from the only on holding this opinion. 175 out of 193 countries have transitioned to VAT because of the obvious benefits. Trump shaking more money out of US consumers with new taxes on imported products does nothing to fix the issue. As the article points out, domestically produced and consumed products suffer from the same problem.
        firesteelrain 2y ago
        And 170 nations can be wrong. https://www.quora.com/Why-does-the-US-not-have-a-VAT-or-national-sales-tax-like-most-other-developed-countries-How-do-Americans-feel-about-being-taxed-for-their-purchases https://www.quora.com/Why-does-the-US-not-have-a-VAT-or-nati...

by jsnell 2y ago

firesteelrain 2y ago

I get it - you don’t understand how this works. One more time You are correct that that all companies pay corporate taxes. We have established that. VAT is already baked into the cost of production at every step in a VAT-based economy. If VAT were not refunded, that 19% tax cost would be included in the price, making the bulldozer more expensive abroad. Technically, VAT refunds are not an "export subsidy" in the traditional sense (where the government directly pays companies to export). BUT, the effect is the same as a subsidy and it removes tax costs from exports, giving VAT-based economies a competitive advantage. The US does not provide tax relief for its exporters and does not impose VAT on imports. "Everyone is on a level playing field" Wrong. The US does not refund taxes on exports, while VAT countries do When you are ready to understand that part let me know.

mopsi 2y ago
> The US does not provide tax relief for its exporters and does not impose VAT on imports. It does. Exports from the US are exempt from sales tax, the same way others exempt their exports from VAT. Neither side pays domestic consumption taxes on exported products, and both sides charge consumption taxes equally on all domestic consumption, no matter where the products were produced. Both American and European products cost a little more in Germany due to 19% VAT, and both cost a little less in the US due to 7% sales tax. Nobody gets a free ride.
- firesteelrain 2y ago
  US is not exempt because it accumulates throughout the entire process whereas VAT is refunded. US bakes the sales tax on acquired parts from their suppliers into the cost of their exported products whereas the EU exporters have an advantage. It’s a structural problem with the US tax system in this case.
  - mopsi 2y ago
    Raw materials like steel used in bulldozers, as well as machinery and supplies, are often exempt from sales tax, especially when the finished products are exported. Nevertheless, in some scenarios, sales tax can indeed cascade and be charged multiple times during the manufacturing process, so even if it's not charged at the final step, there's still a component of it in the final price to the buyer. This is not a hidden tariff by other countries against US products. Other countries have no control over this. The US government simply sucks at taxation because it has not transitioned to VAT, and products cost more to manufacture than they would have under a better tax system.
    - firesteelrain 2y ago
      It’s your opinion that it’s better. Not everyone agrees. Tariffs are legal under US law to apply. EU also needs to step up their military contributions before Russia bulldozes them.
      - mopsi 2y ago
        I'm far from the only on holding this opinion. 175 out of 193 countries have transitioned to VAT because of the obvious benefits. Trump shaking more money out of US consumers with new taxes on imported products does nothing to fix the issue. As the article points out, domestically produced and consumed products suffer from the same problem.
        firesteelrain 2y ago
        And 170 nations can be wrong. https://www.quora.com/Why-does-the-US-not-have-a-VAT-or-national-sales-tax-like-most-other-developed-countries-How-do-Americans-feel-about-being-taxed-for-their-purchases https://www.quora.com/Why-does-the-US-not-have-a-VAT-or-nati...