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by vidarh 3907 days ago
The issue with VAT is that as usually applied it is an extremely regressive tax. Poorer people spend a far higher proportion on their income on purchases that have VAT applied. If more categories of basic goods were zero-rated or exempt, or if other mechanisms were used to make the VAT burden less regressive, then it might be viable.
2 comments
lagadu 3907 days ago
That's how most of Europe does VAT: food, cultural and other essential products enjoy a very reduced VAT rate in many (but not all) countries here[1].

[1] https://en.wikipedia.org/wiki/Value-added_tax#Tax_rates

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rmc 3907 days ago
There can still be VAT for things poor people buy. Is there chocolate on your biscuit? Then it's "luxury" and you have to pay VAT.
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lorenzhs 3907 days ago
True, but at least the price label in the supermarket is the final price you pay, no nasty surprises at checkout. VAT is already included in the advertised price, so you know exactly how much you'll have to pay. Apparently, the same is not true of sales tax in (some states of?) the US.

It doesn't say the VAT rate on the label, but you can figure that out from your receipt after solving a bin packing problem :) Receipts contain a listing of the different VAT rates (e.g. in Germany, x€ at 19% and y€ at 7%)

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rmc 3907 days ago
> but at least the price label in the supermarket is the final price you pay, no nasty surprises at checkout

Er, that's how nearly everywhere does it. And is irrelevant to whether VAT or income tax should be the main way to raise money

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jkot 3907 days ago
That is just bullshit. Why books or "revenues from artistic works" has 10% but oil 50% VAT? Most people need heating oil more than paintings.
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lagadu 3907 days ago
It's a matter of social policy. If you want to encourage more artistry one of the available ways is reducing taxes on it.

If someone is against it they're most welcome to vote against it.

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jkot 3907 days ago
So reduced VAT is not for 'essential' stuff.
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lsaferite 3907 days ago
The FairTax proposal in the US addressed this with a "prebate" that was mailed out to every person (not sure the criteria) at the beginning of the year. This was a check that covered the taxes on base (poverty?) level spending. This was meant to remove the regressive taxation effect.
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rmc 3907 days ago
Nice in theory. In practice how many really poor people have address, or bank accounts which they can use to lodge it?
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