EPTThe European Debt Crisis and the Euro - Page 12
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Rothbardian
United States497 Posts
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TanGeng
Sanya12364 Posts
On March 07 2010 00:41 Rothbardian wrote: A VAT is a tax on every stage of production, whereas a sales tax is only a tax on the end product. In essence a 20% VAT tax on something that takes 5 stages of production to complete is basically doubling the cost of the product. Why do you think everything cost so much in Europe? VAT is an isolated tax on consumption of productivity - rate times retail price minus cost of raw goods. The VAT costs more to administer and is harder to evade. The strange thing about the VAT is that it discriminates against foreign and domestic goods. All goods have to go through the VAT which means imports are a huge percent more. VAT is also reimbursed on export so it favors exporting too. As far as tax evasion, there have been some really nasty examples of tax evasion on certain speculation markets such as carbon credits where traders have ripped off governments by importing and exporting and in the process paying and claiming VAT reimbursements without actually paying the tax. Seems like a total racket to me. | ||
zatic
Zurich15328 Posts
On March 07 2010 00:41 Rothbardian wrote: A VAT is a tax on every stage of production, whereas a sales tax is only a tax on the end product. In essence a 20% VAT tax on something that takes 5 stages of production to complete is basically doubling the cost of the product. Why do you think everything cost so much in Europe? Classic example of "libertarians" having no clue about anything. This actually tops Aegraen's understanding of progressive taxation. The hardest part about being libertarian is reading what kind of cringing nonsense other "libertarians" spread. | ||
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{CC}StealthBlue
United States41117 Posts
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KwarK
United States42693 Posts
On March 07 2010 14:13 zatic wrote: Classic example of "libertarians" having no clue about anything. This actually tops Aegraen's understanding of progressive taxation. The hardest part about being libertarian is reading what kind of cringing nonsense other "libertarians" spread. That and a 20% tax applied five times over would increase the price of the product by 2.48 times, not just double it. So a failure on mathematical grounds as well as lacking basic understanding. Still, this is the internet, it's not like we should expect people to understand the views they voice. | ||
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ghrur
United States3786 Posts
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Rothbardian
United States497 Posts
On March 07 2010 15:05 KwarK wrote: That and a 20% tax applied five times over would increase the price of the product by 2.48 times, not just double it. So a failure on mathematical grounds as well as lacking basic understanding. Still, this is the internet, it's not like we should expect people to understand the views they voice. What do you think a descriptor is? 'basically' Also, a VAT is a tax on every stage of production because every company has to pay the tax. Sure, you 'may' get some back, but that cost is always passed along to the next stage of production. It is the worst tax imaginable. Not only making each and every company an agent of the IRS, but it also is one of the most regressive taxes there is, moreover, one of the hardest to evade. | ||
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KwarK
United States42693 Posts
On March 07 2010 19:50 Rothbardian wrote: What do you think a descriptor is? 'basically' You were out by 48%. That's a fair margin of error. | ||
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zatic
Zurich15328 Posts
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mawno
Sweden114 Posts
On March 07 2010 19:50 Rothbardian wrote: Also, a VAT is a tax on every stage of production because every company has to pay the tax. Sure, you 'may' get some back, but that cost is always passed along to the next stage of production. It is the worst tax imaginable. Not only making each and every company an agent of the IRS, but it also is one of the most regressive taxes there is, moreover, one of the hardest to evade. You are confusing VAT with sales tax. VAT is only applied once, to the end consumer. | ||
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Silvanel
Poland4729 Posts
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rererebanned
67 Posts
We have to start with the simple fact that all the countries are different. Rich France and (West) Germany, who manufacture top quality products (ok, maybe not the Frenchies), which are later sold around the world and probably will be sold even if their currencies are strong. There are poor countries like Greece, who do not manufacture so much and rely on imports. Obviously they need to export something in order to maintain trade balance. This can be done by tourism for example. This can be done by MAKING people work for more years. Getting a pension at the age of 60 and at the age of 67 is a huge difference. Then we have USA, who have a "world currency", which in my opinion, is a term coined just to hide the fact that USA has a gigantic trade deficit and it is exchanging their dollars (paper) for goods. At some point the bubble will burst - either USA will not repay their debt (and leave the holders of the currency with "paper"), or it will have to repay the debt - either by exporting more, or by selling their companies/land. Then we have the EU, which was made with the idea of building "one" market, where the countries would not compete with each other by means of currency. Basically "weaker" money, means higher export. That's why China keeps their currency at artificially low level. Please note however, that EU (as written before) consists of countires at different level, which requires different economic policies. One want weak euro, others want strong (because they will export anyway). I believe though that the Euro is too strong - especially as dollar has been getting weaker and weaker. This way USA can export more to the EU and harm the local manfuacturers. Obviously, Greece doesnt help, by falsifying the statistics; but we have to know that the "free market" of currencies seems to lack ANY regulations, which allows banks and investors such as Soros, rob "the avarage Joe" (or average company) by changing the exchange rates. Here in Poland for example, the exchange rate was like 3.2 polish zlotys per euro and changed to 4.6 at some time. The exporters were super happy of course; but the importers (and many companies often imports parts etc.) were shocked. Such things ruin plans. It is hard to do a good plan with exchange rates chaning by few %, and what about such big changes? Personally I believe that the government is playing to weaken the zloty, so that their yearly budget deficit does not surpress a limit in the constitution (some incomes are calculated from euro->pln, so 100m euro can be 320m pln or 460m pln). Or maybe it's just some investment bank screwing the country. IN theory euro solves such problems (of speculators), but this does not allow any monetary policy. And each country needs its own! We could even create some NWO theory that the whole oil crisis, was created in order to devaluate the dollar. As for the EU funds - the money is collected from every country (including rich and poor) and then spent on random businesses. Sometimes legit, nice startups, or working companies that get a chance to develop; and often to incredibly retarded projects which are just "made to spend money". Seriously, sometimes such bizzarre projects are sponsored that I wonder if they would give money for "new pyramids". It's hard to judge whether thouse founds are good or not; definitely they help; here in Poland, which is a poor country (50 years of communism hello!), many roads were built, and there were lots of investments into infrastructure thanks to those money. At the same time we have greece which collect money for lime trees (more trees than their total area...). And noone controls it due to politics, or clumsiness. As for the VAT part - Im not really sure how does the sales tax in the USA work. VAT is designed to "control" every tax payer on every step of building a product. It requires lots of accounting and is in generally pretty troublesome, due to lots of technicalities, exemptions, differences between countries (even though all the VAT law in the EU should be made according to directives). In addition it is much, much higher than in the USA. VAT can be between 15 - 25%. Usually it's like 20%+; I dont know how high is the sales tax in the USA, but I assume much cheaper. In addition, VAT is calculated on fucking everything. It is much harder to have a "grey economy" with VAT, but in fact this happens in many countries, especially Italy (15% of GDP from grey area); I have some experience with dealing with VAT and I heard about different ways of "not to pay it to keep your company alive". Also, we didnt even touch the subject of the fact that europe is aging, or in fact dying. If there were no arab immigrants, who have lots of children (which leads to other problems) the europe would be dying. Countries like Poland faced gigantic emigration due to unemployment - those people probably wont come back (with their babies, if they have any). Free market isnt that good as they say. With free trade, in general, everyone should earn "an average salary" - which means in USA, Europe (even Eastern!) it should be lower, because the Chinese earn much, much less... In fact we could also make another NWO theory that "there is too much >free< money, which has to be used somehow". Thus bubbles are made. In dotcom, in housing, in oil. This way (governments? central banks?) try to stop the inflation that they create themselves by creating flat money by pressing a button. | ||
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DwmC_Foefen
Belgium2186 Posts
VAT is only taxed on the endconsumer. It ain't troublesome. | ||
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Manit0u
Poland17257 Posts
Required reading for anyone who wants to post anything more on the subject. | ||
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TanGeng
Sanya12364 Posts
On March 08 2010 00:29 DwmC_Foefen wrote: Why wouldn't you pay VAT as a company? You always get it back.. VAT is only taxed on the endconsumer. It ain't troublesome. Because having your customers pay it means that they might think your product is too expensive. This tax like most other taxes is passed on to the end consumer but the business men suffer a shrinking of market in the process as potential customers might be turned away by the increased cost. As for why pay it. It's not like the companies have a choice in paying it or getting it back or not. @rererebanned decent English - some silly kids these days int eh US can't even write like that. LOL. Nice contribution. | ||
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rererebanned
67 Posts
On March 08 2010 00:29 DwmC_Foefen wrote: Why wouldn't you pay VAT as a company? You always get it back.. If you sell without tax, you sell much cheaper (so your customers are happy); and you can sell much more. In addition everything is grey. Imagine you run a hotel and charge 100 eur per night. With tax it's 120 eur (assumption 20%). A guy with 600 eur comes to you. He pays you for 5 nights (5x 120 = 600). You earn 500. If the corporate income tax is 10%, you earn 450. You decide to cheat - he pays you 6x100 for 6 nights (no vat). You earn 600 (and this is completely untaxed, you dont pay CIT or any other taxes on it). In addition, there are lots of things where you cant deduct all the VAT, e.g. fuel (it depends on the country though I beleive). | ||
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Badjas
Netherlands2038 Posts
Really, the only reason why VAT is mentioned on receipts and invoices, is so that companies can see this and claim it back from the tax office, for consumers it could be completely left out. (But it is not, because some customers buy on behalf of a company and you don't know as a seller when that is the case) | ||
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KingKRule
United States84 Posts
European exports will rise because it'll be cheaper for other countries to buy European products. | ||
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rererebanned
67 Posts
On March 08 2010 04:20 Badjas wrote: rererebanned, you can't sell without tax. The customer just pays you what you ask for a product, and you got to explain to your tax collector why you won't be paying any VAT on that transaction. Your tax collector will probably disagree on that 'not selling with tax' idea. I never said that it was legal. It's just how many companies operate. They sell, say 80% "the right way" and the last 20% without any tax. Of course, they can face serious problems if this is found; but it's especially common in the service sector, since it's pretty hard to prove that something has/has not been made e.g. your plumber, can make you pay 120 eur (with tax), or say 110 eur (without an invoice/receipt) and just pocket 10 eur "of bonus". Of that "legal" 100 eur, he'd probably have to pay other taxes; so it would be even less. Many businesses operate on really low margins; fuck I have seen shops which do not sell the goods by means of cash register. I dont know where do the goods they sell come from; they are either counterfeits, smuggle (cigarettes are muuuuuuuuuuuch cheaper in the former soviet countries due to lower excise taxes), or "produced without anyone noticing" (how the fuck can you counterfeit bread?). Of course the big companies cannot really operate this way; but all the small companies, which struggle to make ends meet often use not that legal options to survive. It's just the way it is. It happens in Italy, in Poland, and, as far as I know in all countries with VAT. Call a plumber and see if he will give you a receipt, or just collect money from you and pocket it. In fact, Im not sure if the directives even tell that some professions need to use cash registers. Im pretty sure that lawyers and doctors (some medical procedures are extempt though), don't! Which is an incredibly grey area. I know this happens in Poland and Greece, probably many other countries. Really, the only reason why VAT is mentioned on receipts and invoices, is so that companies can see this and claim it back from the tax office, for consumers it could be completely left out. (But it is not, because some customers buy on behalf of a company and you don't know as a seller when that is the case) I dont know how does VAT look like in other countries, but as far as I know it follows the directives everywhere, thus there are lots of exemptions, different rates, problem of "the place of conducting business" and so on. Believe me, the accounting companies spend days trying to solve some of the problems. And there are many ways then a country can be conned out of money. The whole "give back process" has led to companies getting back money which was never paid; there are people who sell "empty invoices", and there is the simple "grey economy" which I described above. At micro level, VAT is really hurting the businesses. Believe me; the "little" people and companies pay much more than the big companies hidden behind an army of tax advisors; which also get cash-backs by means of grants from the government/EU. | ||
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TanGeng
Sanya12364 Posts
Taxis especially taxis if anyone's ever been in Europe. There's on the book price with receipt and everything and there's the "friend" price with no receipt. | ||
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