[sfe22]

Is vat not a tax? I think every government cost that is a percentage of income or spending should be calculated as your expense for the government. I think inflation also should be kept in mind as it is a hidden tax. Maybe harder to calculate.

[charlesdm]

VAT is a tax on consumption. But it is only levied when you take a certain action with your funds -- i.e. consume it. You could also (re)invest and let your capital compound.

So yes, if you spend all your money to the last penny, that would be your tax rate. But many (higher income) people do not.

[sfe22]

But all your income is meant to be spent. All people invest so they get to buy more in the future, not for the sake of it. If you don’t pay VAT today, you will in the future.

[nicbou]

VAT is added on top of your invoices. It's paid by the end user to the government. It only passes through you.

When I measure my revenue, I always leave VAT out. It was never my money.