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VAT is applied to services too, at least here in Europe. Now, if we were to split VAT in two: 1. tax on imports, 2. tax on whatever goods/services people in th
by mk89 2y ago
VAT is applied to services too, at least here in Europe.
Now, if we were to split VAT in two: 1. tax on imports, 2. tax on whatever goods/services people in that country pay/buy, you could keep just the 2 and have free trade with other countries with zero tax. Or the opposite, do tax on imports and free trade inside your country.
The fact that VAT has always been like that (1 and 2 together), it doesn't mean it has to stay that way.
Not sure why we should care about how a country decides to apply taxation in their own country, especially if that country sets a more or less equal tax for everyone - that's understandable.
- cwillu 2y ago> 1. tax on imports, 2. tax on whatever goods/services people in that > country pay/buy, you could keep just the 2 and have free trade with > other countries with zero tax. That is completely ridiculous. Why would there a VAT on, say, domestically produced pasta on the grocery shelf, while the Italian import pasta right next to it has none?
- mk89 2y agoTo allow free trade of certain goods which your country needs more. This is why tariffs are much more flexible, because they allow you to, let's say, trade oil at a cheaper price, while pasta (widely produced in europe) at a higher price.
- cwillu 2y agoThen you would just not tax those goods. We already do this with basic foodstuffs; this has nothing to do with tariffs.
- wqaatwt 2y agoSo what you are suggesting is a reverse tariff? Punish local producers for manufacturing goods that we’d rather import. Well.. that’s an idea.. I suppose..
- the_gipsy 2y agoVAT is never universal, different products already get different rates.
- Zanfa 2y agoVAT doesn't affect free trade in any way though. You're mixing up unrelated concepts.
- mk89 2y agoIt's how the EU today works BTW. In german shops you can buy locally produced pasta or imported Italian pasta (no import tax), both with 7% vat on it. Now you can claim "but this is EU...". Why can't this free trade be done with individual countries for specific products then?
- gspr 2y agoYou and the parent poster are talking past each other. They asked: > Why would there a VAT on, say, domestically produced pasta on the grocery shelf, while the Italian import pasta right next to it has none? You answer (correctly) that that isn't the case, both boxes of pasta have the same VAT applied to it. In light of this, I think people are really struggling to understand what you're arguing for or against here. The whole subthread started by someone pointing out that the 10%-for-everyone version of trump's tarrifs is very different from European VAT, since European VAT applies to all products sold to consumers, regardless of whether they are imported or not. That is, indeed, a vital difference. You seem to argue that it's not the case, while giving examples of how it is the case, leaving everyone confused.
- the_gipsy 2y agoYou cannot possibly make imports VAT excempt, that's just instantly destroying your domestic market for no gain anywhere.