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One interesting thing I learned from this article is that the US does not have a VAT, but a sales tax on a state level. It took me a while to understand this as

by pmr_ 13y ago

One interesting thing I learned from this article is that the US does not have a VAT, but a sales tax on a state level. It took me a while to understand this as most countries in Europe usually have only a VAT on the nation state level. I guess the US system does have some benefits but it seems shockingly insufficient in the face of online retailers. Wikipedia also tells me that there have been pushes to introduce a national VAT in the US, but they have failed. To me that only seems to have benefits: less administration, less rules, less loopholes. Could someone outline the arguments against it?

showerst 13y ago
In the US it's actually more insane, we can also have different sales taxes at the county (a smaller administrative unit w/in states, there are a few thousand of them nationwide), and the city level. We also have different tax rates on different kinds of products (restaurants vs clothes vs gas, for example.) This reasoning behind this is giving individual areas the flexibility to tax based on their individual needs, so a county could vote to raise sales taxes for (X) years to fund a new high school or something. I believe they usually do this by other methods (like bonds), but want to keep taxes as an option. I live in Washington DC, which is tiny and close to 2 other states, so there are days when I can end up going to DC, MD, and VA and buying food and gas, so I pay 6 different tax rates in the same day. It's all transparent to me of course, and most people only pay attention to income taxes when they think about moving somewhere.
aestra 13y ago
>a sales tax on a state level Some states have taxes, some don't. Some states allow cities or counties to have taxes, some don't. Some tax different items differently. Most places have no tax on food in grocery stores, but tax restaurants (as it is a service). One city can tax clothes, but one does not, etc. For example, in New York City, there is a small tax on most/all (a fraction of a percent) taxable items to fund the mass transit system there, the MTA. Some places make up for lack of/lower sales tax by larger property taxes, or other types of taxes (lotteries, etc...) High tourist areas can tax things like rental cars and hotels. http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_State... I think it's more part of the United States culture, with things being done on a more local level. It's in the long run, confusing.
valar_m 13y ago
One reason is that it taxes consumption, not income, so the poor and middle class are hit the hardest because they spend a larger percentage of their income on food, clothes, etc.
- jacalata 13y ago
  I think the question is why have state sales taxes instead of a national sales tax.

by pmr_ 13y ago

showerst 13y ago

In the US it's actually more insane, we can also have different sales taxes at the county (a smaller administrative unit w/in states, there are a few thousand of them nationwide), and the city level. We also have different tax rates on different kinds of products (restaurants vs clothes vs gas, for example.) This reasoning behind this is giving individual areas the flexibility to tax based on their individual needs, so a county could vote to raise sales taxes for (X) years to fund a new high school or something. I believe they usually do this by other methods (like bonds), but want to keep taxes as an option. I live in Washington DC, which is tiny and close to 2 other states, so there are days when I can end up going to DC, MD, and VA and buying food and gas, so I pay 6 different tax rates in the same day. It's all transparent to me of course, and most people only pay attention to income taxes when they think about moving somewhere.

aestra 13y ago

>a sales tax on a state level Some states have taxes, some don't. Some states allow cities or counties to have taxes, some don't. Some tax different items differently. Most places have no tax on food in grocery stores, but tax restaurants (as it is a service). One city can tax clothes, but one does not, etc. For example, in New York City, there is a small tax on most/all (a fraction of a percent) taxable items to fund the mass transit system there, the MTA. Some places make up for lack of/lower sales tax by larger property taxes, or other types of taxes (lotteries, etc...) High tourist areas can tax things like rental cars and hotels. http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_State... I think it's more part of the United States culture, with things being done on a more local level. It's in the long run, confusing.

valar_m 13y ago

One reason is that it taxes consumption, not income, so the poor and middle class are hit the hardest because they spend a larger percentage of their income on food, clothes, etc.

jacalata 13y ago
I think the question is why have state sales taxes instead of a national sales tax.