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To: sparklite2

I don’t agree with your understanding of the VAT at all. The VAT is like a sales tax. The consumer pays the full tax. The producers pay their incremental portion along the production line but recoup their added contribution as it passes on down the line. Hence the consumer eventually pays it. The value added tax countries don’t have income taxes. They have the VAT. VAT countries levy the VAT on domestic and foreign goods equally.

The United workers and companies pay income taxes on goods they make before they are sold domestically or overseas.

When we buy a product from a VAT country it is sold to us without the VAT added on to the cost. When we sell our goods to a VAT country, they add on their VAT. In effect they are levying tariffs on us. If tariffs are so debilitating to the economy, explain how China has roared to the front of the line in world manufacturing?


38 posted on 03/02/2018 8:16:49 PM PST by LoneRangerMassachusetts (Behind enemy lines)
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To: LoneRangerMassachusetts

I don’t agree with your understanding of the VAT at all.

That's odd, considering you are restating what I said.

The VAT is like a sales tax. The consumer pays the full tax.

Of course.   The tax is added to the product cost during production and emerges as part of the retail price. I said as much.

The producers pay their incremental portion along the production line but recoup their added contribution as it passes on down the line. Hence the consumer eventually pays it.

This is also as I described it.

The value added tax countries don’t have income taxes. They have the VAT. VAT countries levy the VAT on domestic and foreign goods equally.

How does that work?  If, say, the VAT on German car comes to a thousand dollars, do they apply that to an imported car?

 The United workers and companies pay income taxes on goods they make before they are sold domestically or overseas.

Unions pay income taxes on their wages, not on the goods they produce.  And American companies do not pay taxes on the goods before they are sold.  They pay taxes on the net profit of the company at the end of their fiscal period.

When we buy a product from a VAT country it is sold to us without the VAT added on to the cost.

If the VAT is integrated into the price, I don't see how it can be backed out for foreign sale.

 When we sell our goods to a VAT country, they add on their VAT. In effect they are levying tariffs on us.

If VAT is levied on imports, it looks like a tariff to me, too.  If they are.

If tariffs are so debilitating to the economy, explain how China has roared to the front of the line in world manufacturing?

I'm sure there are a myriad of reasons for that.  Tariffs affect our economy by being, in effect, a consumption tax in addition to all the other taxes we pay.  And no nation ever taxed itself into prosperity.

42 posted on 03/02/2018 9:34:06 PM PST by sparklite2 (See more at Sparklite Times)
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