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Starbucks is not a good example for several reasons. First, they really do have global recognition through the American culture (movies, etc). Second, this is

by blfr 12y ago

Starbucks is not a good example for several reasons. First, they really do have global recognition through the American culture (movies, etc). Second, this is a fairly simple scheme where a subsidiary pays for using the brand. Sure, it's hard to price and the company will tend towards price that optimizes their taxes rather than the one in line with real benefit but it's not fictional, there's a rational reason for the licensee to license. Finally, Starbuck's business model makes it really easy to just tax the transactions with VAT. They churn out coffee, not sophisticated financial products, not ephemeral ads. They physically have to be where they operate. And they mostly sell to regular customers, not other businesses. (Well, I'm guessing here.) It's not like having a chain of companies across Europe and Bermuda. Not even like serving the entire EU from Luxembourg.

DanBC 12y ago
> Finally, Starbuck's business model makes it really easy to just tax the transactions with VAT. They churn out coffee, not sophisticated financial products, not ephemeral ads. They physically have to be where they operate. And they mostly sell to regular customers, not other businesses. (Well, I'm guessing here.) Starbucks' products are already VAT rated where appropriate. But VAT is paid by the customer, not the business. If more of the Starbucks product range was brought into VATable goods Starbucks would just push prices up with big signs saying "TAX INCREASE MEANS HIGHER PRICES". Unless you're asking for a radical change to tax law to make companies pay VAT?
- deleted 12y ago
  [deleted]
- blfr 12y ago
  All taxes and all costs of any viable business are ultimately paid by the customer. You cover everything from their CIT to inventory shrinkage. Companies don't have any other source of income. The only difference is that VAT is explicitly listed on the receipt. You can count on price stickiness for a while but eventually tax increases will lead to price increases.

by blfr 12y ago

DanBC 12y ago

> Finally, Starbuck's business model makes it really easy to just tax the transactions with VAT. They churn out coffee, not sophisticated financial products, not ephemeral ads. They physically have to be where they operate. And they mostly sell to regular customers, not other businesses. (Well, I'm guessing here.) Starbucks' products are already VAT rated where appropriate. But VAT is paid by the customer, not the business. If more of the Starbucks product range was brought into VATable goods Starbucks would just push prices up with big signs saying "TAX INCREASE MEANS HIGHER PRICES". Unless you're asking for a radical change to tax law to make companies pay VAT?

deleted 12y ago
[deleted]
blfr 12y ago
All taxes and all costs of any viable business are ultimately paid by the customer. You cover everything from their CIT to inventory shrinkage. Companies don't have any other source of income. The only difference is that VAT is explicitly listed on the receipt. You can count on price stickiness for a while but eventually tax increases will lead to price increases.