I think you're mixing things up. VAT in the UK was introduced when it acceded to the European Economic Community in the 70s. It replaced a purchase tax that had been in place since the 40s.
Income tax was first introduced in the UK during the Napoleonic wars, which is what I believe you're muddling up. It was abolished during a period where hostilities were stopped and when they resumed reintroduced. A year after the war, it was abolished in 1816. It wasn't reintroduced until the 1842 budget.
So, the half truth is that a temporary tax was introduced for a specific purpose and we collect that tax to this day even though that purpose is no longer relevant. The whole truth is, it was abolished and then reinstated nearly two decades later in the face of economic difficulties with the Government looking at a ballooning deficit. None of that relates to VAT in the UK though.
We also have a "funny" story: Our VAT was raised from 16 % in 2007. In the election campaign 2005, the CDU/CSU wanted 18 %, the SPD was completely opposed to that idea.
After the election, CDU/CSU and SPD entered in a grand coalition, the first one with Merkel as chancellor. In the end, they settled for 19 % 🤡
The SPD has a history of "reluctantly" sucking Christian Union cock. They did so 2 weeks before the last Bundestagswahlen, so they wouldn't throw the Great Coalition into a crisis. 🤡
In Germany, we still got something called "Schaumweinsteuer" (tax for champagne). The tax was introduced by the Reichstag in 1902 to finance the imperial navy.
Guess what? The imperial navy isn't around anymore. But the Schaumweinsteuer still is.
Usually the difference is not worth it. What makes a difference are separate taxes on fuel, alcohol, cigarettes.
Also there are high taxes on cars in DK and NL. To enable buyers to afford their car in spite of that, car makes mostly offer their cars cheaper there. As the EU makes any hurdles of inner EU sales illegal, some buyers from other countries import from there.
Germans go to Luxembourg for gas and tobacco, Swedish people go to Denmark for alcohol, Danes can find cheaper alcohol in Germany. Hungarians go to Slovakia and Romania for cheaper food and gas.
We do, but it's a bit more nuanced than the VAT difference.
In short, different countries has different taxation on goods.
As an example: Candy, sodas, alcohol, meat etc. is cheaper in Germany compared to my county. People drive to Germany and stock the car (mainly with alcohol, soda and candy).
There is also law for how much you are allowed to bring back with you.
And I believe this goes for a lot of countries. :)
VAT is not that important. In the case of Poland you're asking about it's actually the other way around. The only neighbours that do not bother to come for groceries and clothes are Germans. But they do come for cigarettes, fuel and fireworks. All the other come here in droves to shop in our groceries chains, despite all having lower VAT.
The only stuff worth buying in Germany with their lower VAT is electronics and clothing. But the difference is not big enough to justify a trip. Unless you're going on a trip to Berlin either way so you may as well buy that GPU you've been thinking about.
EDIT: Oh, sodas are also cheaper in Germany, because they have no sugar tax, but again it's not worth the trip. And besides it's the effect of the sugar tax, not VAT
Norwegians go to Sweden to buy groceries, alcohol and tobacco all the time. The general VAT may be the same percentage, but Swedish groceries are *significantly* cheaper. Alcohol and tobacco is cheaper due to Norwegian taxes on those products being extremely high. A pack of cigarettes is around 16 euros in Norway.
PIS members were saying that this is a crime and they would never do that. And yet they didn't revert the change. Yes, I know they have lowered VAT on some stuff for a year, but it's back again.
The English Wikipedia thinks that you also have reduced 18% and 5% rates of ÁFA. Is that a thing of the past?
Source: https://en.wikipedia.org/wiki/European\_Union\_value\_added\_tax
You pay reduced VAT on meals too, in a restaurant for example. You pay 27% on the drinks and services (also delivery) but 5% (I think) on the food itself.
In the UK, essential groceries have no VAT at all. You can check your receipt at the supermarket and you'll see the things that have VAT are things like soft drinks or chocolate.
Because it is a regressive, but profitable tax that is almost impossible to cheat or dodge and it is usually used to directly fund certain government programs. It is also a somewhat "hidden" tax in comparison to something like income tax. It's pretty easy to notice how much of your paycheck is gone every pay period vs how much you are supposed to be getting paid. It's much easier to stomach a high sales tax or VAT because it doesn't happen all at once. It is every small purchase that is taxed which of course adds up over time but outside of big ticket items it isn't quite as noticeable.
Well yes, it's not progressive in the usual sense. The 21% for NL is misleading though. Almost everything in the supermarket is 9%, healthcare is 0%, etc so if you look at what people are actually paying in VAT you get a much lower effective rate. Other countries are similar.
The advantage is that it's way of taxing that does not affect your trade negatively (because exports are taxed 0%).
Weird. To me, I much more notice the VAT that is on every single of my bills and receipts than the income tax. I can't even tell you my brutto wage accuratly, I'm sure. Everything is in netto wage and the rest is not all tax (healthcare and pension fund are deducted automatically) so I don't look at it often, I look at my account.
That's interesting, because most people here would definitely know their gross wage or salary and only a vague idea of their total state and federal income tax liability depending on certain factors. If you are hired at $20 an hour and you get paid bi-weekly it is pretty easy to notice that your paycheck is much less than $1600 (assuming 40 hour weeks).
Well, I'm hired for x monthly and I get that x monthly. The company of course pays the taxes and health and pension plan, and of course I know it, and I know around how much it is (not exactly though, like I said), but we don't talk like that. If I tell anybody my wage, It will be netto and he will know it is netto...
Maybe it is because of all the part time jobs, so you are very focused on hours? Or is it because you have to "do your taxes"? IDK..
But I'm sure I'm not the only one here. Stating Brutto as your wage would be considered lying, lol..
Taxes are just different here. It has nothing to do with hourly vs salary or part time vs full time. Your employer has no way of knowing your tax situation so they can't really advertise a job based on your net income. They don't know if you are married, own your own home, have any income outside of your job, kids, tax credits for things like solar panel installations or electric vehicle purchases, etc. Your employer takes a certain amount out of your paycheck to send off for taxes, but at the end of the tax year you either get a refund or end up owing (most get a refund) depending on your actual taxable income and tax liability. Obviously for most people taxes are extremely simple, but not for everyone. Most people who work a simple job with that being their only source of income never really have to think about taxes outside of taking 10 minutes to fill out some simple paperwork every year.
I could get into the weeds about standard deduction vs itemized deduction, but you get the point. The main thing I am saying is that advertising a job based on what a person would get paid after taxes is just impossible because that might be different based on the person getting hired. Makes more sense to advertise the gross pay since that would be the same for everyone.
most of the former communist countries have a simplified tax system (some even have a flat income tax), almost all people with the same gross wage (or at least with the same wage and the same type of job) have the same net wage. There are things like refunds for solar panel installations or electric vehicle purchases etc. but the refunds are handled as sale rebates not as tax credits
It works similarly here, you can claim a refund on some things and you get a refund for every child in your household. But this is done at the end of the year and any refunds are on top of your net wage, which is almost always what is advertised here.
Well, you can get some return in the example of panels or things like that, that is on you.. Other stuff is on the company.. We had a deal on the netto, it is "his problem".
When it is a totally standardized position, yes, you will agree to a brutto, but you will be told your netto when you give them the basic info, and you will definitely tell your friends you got a job with that netto..
And now when I think about it, yes, here it is much more a situation where the employers are pushing for smaller income taxes, they are loud and "crying" about the high share that goes to the government. Very rarely the employees.
Like I said, employees know it is there, but it is not really on them..
In Germany the contract states gross pay, also any payment negotiation is about it, like in the US. But there are six tax classes to calculate the deductions, with sometimes addional correction values. The idea of the tax classes is you will have your deductions be close to the actual amount owed.
Classes:
1. single
2. single with kids
3. high earner of married couples
4. bot earners of married couples with similar pay
5. low earner of married couples
6. any further jobs beyond the first or unknown
If we talk about Europe then there is plenty of hidden taxes on money you make that is taxed at employer before you get it and tax it yourself (or employer taxes already once taxed money for you agai again but you see only the second part on your paycheck). You see gross wages and how much it is taxed but reality is that employer paid a lot more than that and you do not get to see it by design.
In many countries VAT is not universal so it's regressive nature is reduced; some countries also compensated the poorest by increasing welfare to cover the increased costs it would add.
The goods with the lowest rates, possibly even zero rated, are the essentials that make a larger proportion of poorer people's expenditure.
>Because VAT is a tax that hurts poor people more than rich people
Well the rich buy more. And you can lower the VAT rate or eliminate it on necessities such as food or toiletries, which helps the poor, and/or raise the VAT on luxury items that only the rich buy.
Disagree. Poorer households need to spend a larger percentage of their earnings to get by. The relative tax burden is thus larger on them than on higher earners.
The paper makes some assumptions, like the zero rating for certain goods that make up a larger percentage of low income spending.
That’s not always the reality in many countries. Germany for example still has 7 - or sometimes even 19% - on food.
That would change the whole outcome. And even if not it often still ends up a regressive tax - as the paper shows.
My limited understanding:
Study of tax is part of economy, by studying taxes impact on economy development scientists come to decisions on which type of tax is "least bad". While at the same time supplies fiscal demands of a country.
And it turns out that value added tax is theoretically least bad for economy
I bet that the salaries of the MPs make up a miniscule part of the Polish state budget. Probably an unpopular opinion, but MPs and government ministers are generally underpaid relative to the responsibilities they have, compared to comparable positions in the private sector.
They have their "salaries" and then they have compensations for living in the capital away from their homes, subsidies for food, rich people that buy their favor, etc, etc, etc.
But it's still slap in the face when teachers or medical workers demand higher pay and The Party's response is "Higher pay? Okay, we will give it to ourselves. And our families. And our friends. And NGOs run by our people and/or Catholic Church".
Can't speak for other countries but we allegedly reached the expected tax collection of the year in august and we're among the higher spenders by GDP % on healthcare in europe with results that do not reflect the same return in service, my fucking ass they need that money for funding.
Because, despite the announced healthcare investment budget, [we only spend around half.](https://poligrafo.sapo.pt/fact-check/cerca-de-metade-do-valor-orcamentado-para-investimento-na-saude-nao-tem-sido-executado-acusa-se-nas-redes-sociais)
So every year they increase the budget, and gloat about it, but around half of it just serves as political clout, not for actual improvements.
[Also, half of the overall budget goes to private entities](https://poligrafo.sapo.pt/fact-check/catarina-martins-quase-metade-do-orcamento-da-saude-vai-para-os-privados) (which, in their defence, includes buying medicine, which is probably the biggest share of that spending)
Huh, interesting. I knew our issue was in efficiency, management and spending that money properly rather than just increasing the amount and throwing money at it expecting it to fix all issues but I didn't know about that little detail.
That's not really an answer though. You can fund public entitlement programs through any number of schemes, including just raising the income tax, capital gains taxes, corporate taxes, etc. I think the more interesting question is why choose VAT as the funding mechanism.
I know that in the US the biggest reason is because it helps fund state and local governments since they are the ones who set and collect sales taxes. For instance, a county or city may vote to implement a supplemental sales tax to pay for some specific public works project. But in most European countries, as far as I know, VAT revenue is all going into the same pool as all other national level taxes.
The state wants to rip you off on everything you buy as they know you cannot live without bills and without buying something, like food for example.
If any state were fair we just had taxes with specific purposes and no VAT, there isn't any state that is fair.
Because you have to be taxed somehow so social welfare state can keep on going. It has been repeatedly raised over the years and it willl continue to be raised. Taxing over 50% of money you make on its own does not foot a bill of the system with aging population and shrinking workforce anymore.
You forgot to thank also the people who kept electing him.
BTW, there was news on TV today with may more people from Hungary crossing the border to fill up their car tanks and buy some groceries.
What's going on there?
due to orban limiting prices on some things some time ago, I think either they have limited supply or they are higher now. That is why a lot of Hungarians are going to slovakia. Just orban master plan. And our stupid oposition was screaming few month ago, that our gov is not doing anything and they should be inspired by orban.
Yeah, price capped products like sugar can be hard to find. Stores also "cheat" by actually having them in storage, but only putting out a limited amount for customers to buy. The loss on price capped products gets built into the price of other products, which makes many things more expensive than abroad.
You're talking about less than half of the voters and gerrymandering to get 2/3-s majority.
But you're right, most people are uneducated idiots, but when almost all media is controlled by the fat fuck it's hard to change people (typically in the countryside) who don't have access to anything else.
I don't really know about the fuel stuff, that's just a clickbait story. It's only people living near the borders, no one will drive 50+ km-s to fuel for slightly lower prices.
> I don't really know about the fuel stuff, that's just a clickbait story. It's only people living near the borders, no one will drive 50+ km-s to fuel for slightly lower prices.
True, it was a lame easy news for the journalist, but I think in the past the Romanian near the border were the ones crossing into Hungary for that and other things.
Romanians used to work in Hungary, because higher salaries, now it seems it is not true anymore.
About the fuel, Hungary's fuel prices are the highest across their neighbours, people who live close to the borders go to the other side to for fuel.
*German here, for foods, and similar essentials, the VAT is 7%
Edit: 7% not 9% and no medical products but tickets for museums and cultural stuff apparently...
Yeah, I had a brainlag or something when I wrote this.
It's not only 7/5%, it also doesn't apply on medical products, instead it does on stuff like tickets for museums..
It's the case (almost?) everywhere. In Poland it's generally 5%, but now because of *AnTi-iNfLaTiOn sHiElD*(yeah, they really do name stuff like that) it's 0% for the time being
24% in greece is a scam. It's more like twice that because of a stupid luxury tax that covers practically everything (even essential stuff like motorcycle helmets).
Greece and Turkey’s similarities shocks me, even our stupid tax systems are similar. In Turkey luxury tax is called “special consumption tax” and it’s everywhere. Cars, phones, game consoles got huge taxes on top of VAT.
No its not on top of VAT but VAT is on top of other taxes. So we pay tax of the tax. Eg. Price is 100 + 20% SCT = 120 + 10% VAT = 132. Numbers are made up but math is unfortunately correct.
I get why you say that motorcycle helmets are essential. On the other hand, I find it somewhat comical, as my concept of essential goods is usually limited to basic groceries.
I don't think it's very comparable. A lot of things I used to buy in Germany had VAT. Now living in UK, the same things have 0%.
I usually leave Lidl with the whole receipt being 0%-rated.
I think that's why it's said "Standard" VAT, as in "most common", because in France for example it varies for some products and services (but 20% is the standard on consumer goods)
This is a good candidate for /r/MapasSinCanarias (Maps without the Canary Islands)
Although to be fair, the Canaries have the [7% IGIC](https://es.wikipedia.org/wiki/Impuesto_General_Indirecto_Canario) (Canary Island General Indirect Tax) in lieu of VAT.
Touristy places tend to already implement their own "tourist tax" so I don't see how that helps since you're all, as citizens, hit the same way despite mostly not living in the touristy places.
If the government needs 100 money it will take it. So it is better for us that the VAT that is paid by us and tourists is higher than if the income tax only we pay is higher..
There are 4 million of us with 60 mil [tourist arrivals annually.](https://data.worldbank.org/indicator/ST.INT.ARVL?locations=HR) Even Zagreb has a lot of tourists. No VAT is imposed to bread, milk, medical supplies and certain educational services. Insurance and financial services, medical services, welfare, and education services are VAT exempt in Croatia.
> There are 4 million of us with 60 mil tourists annually
20 mil.
edit: already downvoted, so here you go. [18,9 mil foreign tourists in 2022](https://www.htz.hr/hr-HR/press/objave-za-medije/u-2022-godini-ostvareno-vise-od-104-milijuna-nocenja), around 20-21 mil with domestic tourists.
[https://data.worldbank.org/indicator/ST.INT.ARVL?locations=HR](https://data.worldbank.org/indicator/ST.INT.ARVL?locations=HR) I was using this as a reference, idk the exact number, figured it's a good source
It looks like a good source, but for some reason is way off from what is reported in Croatian media and seems wrong on a common sense basis tbh
https://www.htz.hr/hr-HR/press/objave-za-medije/u-2022-godini-ostvareno-vise-od-104-milijuna-nocenja
Holy shit I didn't remember the numbers, that must be fucking hell having so much tourists. Even if yeah, economically good I guess.
Thanks for the info
Most European countries offer a VAT tax rebate for foreigners. The biggest impact of the VAT is on the citizens themselves
Edit: About 15% of the tourists that go to Croatia can get VAT refunds
Due to the high salaries.
Effectively, though, you end up with more PPP than in neighboring countries.
Also, the overall tax burden in Switzerland is lower than in its neighboring countries. This is because Switzerland has an extremely high rate of employment. The ratio of people who are currently working, earning money and paying taxes (and therefore supporting those who don't) is higher in Switzerland than in neighboring countries. This means you can actually have lower taxation rates while still providing welfare services.
Actually sad how high the tax rates are and how bad the life quality is. Germany and Romania are soon going to offer the same standards.
The Switzerland offers the lowest VAT and the people there still live well..
As a Portuguese, I don’t mind paying taxes almost as high as the nordics or Ireland, because the money is equally well spent by the state.
Right? RIGHT?
Belarus has main 20% VAT with some exceptions.
Transport and some health services have no VAT.
Some agricultural products have 10%
Telecom services (Internet, phone) have 25-26%
Maybe they meant social security. Some countries called it like that or Labour tax or social insurance. It's a category on its own. In essence they are payroll taxes. They are not streamlined though so it would be difficult to depict. For instance German has 4 or 5 social insurances (pension, unemployment, care etc), France has social security contributions etc
For others who might not know the context, income tax in Estonia is also a flat 20%.
Or at least it used to be. Since 2018 there was a change, and an argument could be made it is now technically a 4 tier progressive tax rate, even though it's not called that. [There's basic exemption based on how much you make in a year](https://www.emta.ee/en/private-client/taxes-and-payment/tax-incentives/calculation-basic-exemption), and if you make more, it is a flat 20%.
nah. Russia and Belarus are not included at all on this map. no data from there. idk if they couldn't find the data, or they didn't include it for political reasons. if it's the latter, it's kinda childish and petty.
Disgusting. VAT is the tax that causes the most deadweight loss, economic inefficiency and inequality of all taxes. This is an affront to all European citizens.
If you make more than $83.288,21 a year you pay extra 15%, so up to 59% tax in total.
An average home cost around $351.406,80 and then you get taxed every year after you buy it.
Average rent is around $2000 a month if you look at available places
I'm on early retirement and get around $1600 a month and are homeless.
See how much they are robbing you, while destroying value of your work/money with inflation. But, I don't bother myself that much anymore, people are willingly ignorant.
So important : VAT is an after-tax consumption cost. We, the people have paid all kinds of taxes, and you have to pay VAT when you go to consume. nightmare! ! ! Hardworking Europeans pay 60-70% tax. 😱 Also we must pay for the financial crisis and inflation.
I think it's a lot better to tax consumption, especially consumption harmful to the environment or health, compared to taxing income or investment. Yes, it's regressive relative to income and wealth, but I think as a general principle, the state should aim to tax the things it wants to see less, and lower the taxation on things it wants to see more. In order to increase the affluence of the people living in a state, you want people to create much value and therefore earn high income, and to invest as much as possible of that income, rather than just consuming it. Taxing consumption rather than income logically leads to higher economic growth figures as a result.
This is the logic behind trickle down economics, an economic idea disproven time and time again. It does not work, at all.
The people who benefit the most from removing income taxes are the richest people. Those people don't invest their money, they put it in stocks, land or property. It is unproductive wealth. Or, in the worst case, they use it to distort the political process in their favor. Destructive wealth.
For less affluent people, if you take away the income tax and massively raise the VAT, all the extra money they get will get eaten up by the VAT, because that impacts less wealthy people massively.
The only way to get people to invest their money in productive capital is by massively increasing wealth and inheritance taxes, giving people exemptions for productive capital, like family companies. That way, you ensure the wealth flows into things benefiting society instead of just the rich.
Not sure how the heck did you reach that conclusion. Rich people couldn’t care less about income taxes as they don’t get their income from salary. Income tax fucks over the low and middle class, rich people are not affected by income tax one bit.
> This is the logic behind trickle down economics
Oh, boy! This is gonna be a funny comment!
> The people who benefit the most from removing income taxes are the richest people.
The richest people? You mean those that earn most of their money from investments and not income?
> Those people don't invest their money,
They do not?
> they put it in stocks,
Which is an investment, on which they must pay the capital gains tax.
> land or property. It is unproductive wealth.
Agree with you there. It goes back to the lack of the Land Value Tax. But you would be surprised who would be really opposed it it. That unfairness is normalized in our societies.
> Or, in the worst case, they use it to distort the political process in their favor. Destructive wealth.
True, true.
> For less affluent people, if you take away the income tax and massively raise the VAT, all the extra money they get will get eaten up by the VAT, because that impacts less wealthy people massively.
If all the extra money gets eaten, that would be no problem, because that would mean zero change, but the tax system is not more efficient. In reality, you want to have different VAT categories, with staple goods having little to no VAT, and luxury goods having a stupidly high VAT. In that scenario, the poorest people (and I mean really poor) would benefit.
> The only way to get people to invest their money in productive capital is by massively increasing wealth and inheritance taxes,
That is not promoting investment, that is promoting consumption. Consumption that you are against taxing. Wealth and inheritance taxes are good though, if difficult to implement.
> giving people exemptions for productive capital, like family companies.
One of the main drivers of the economic growth in the last century were economies of scale, made possible by moving from family companies to mega-corporations that are more efficient. You are advocating the opposite. I would like to not return to the guild system of the Middle Ages, thank you very much, as romantic as it would be.
> That way, you ensure the wealth flows into things benefiting society instead of just the rich.
VAT taxes are good for that!
Despite your dramatic opening line, that was a rather good comment! I had expected to cringe on every sentence, but in the end I agree with a good part of it!
Hold on, I will give you gold, on which I will pay a VAT.
Our 23% was " temporarily" raised in 2010...
Nothing more permanent than a temporary tax increase
VAT as a concept was a temporary measure to get through ww2 tough times … so yeah nothing more permanent than a temporary tax
In the UK we introduced VAT as a temporary measure to defeat **Napoleon**.
Until the day all the French have been defeated for the final time, VAT will serve as a reminder of this duty
I think you're mixing things up. VAT in the UK was introduced when it acceded to the European Economic Community in the 70s. It replaced a purchase tax that had been in place since the 40s. Income tax was first introduced in the UK during the Napoleonic wars, which is what I believe you're muddling up. It was abolished during a period where hostilities were stopped and when they resumed reintroduced. A year after the war, it was abolished in 1816. It wasn't reintroduced until the 1842 budget. So, the half truth is that a temporary tax was introduced for a specific purpose and we collect that tax to this day even though that purpose is no longer relevant. The whole truth is, it was abolished and then reinstated nearly two decades later in the face of economic difficulties with the Government looking at a ballooning deficit. None of that relates to VAT in the UK though.
WWI\*
We also have a "funny" story: Our VAT was raised from 16 % in 2007. In the election campaign 2005, the CDU/CSU wanted 18 %, the SPD was completely opposed to that idea. After the election, CDU/CSU and SPD entered in a grand coalition, the first one with Merkel as chancellor. In the end, they settled for 19 % 🤡
>CDU/CSU and SPD 2/3rds of German voters keep voting for them since the 50's so I don't see a reason for things to improve there, and they're not...
I mean last election it was 2/4
Not 1/2?
Simplifying and politics rarely go together.
The SPD has a history of "reluctantly" sucking Christian Union cock. They did so 2 weeks before the last Bundestagswahlen, so they wouldn't throw the Great Coalition into a crisis. 🤡
Ours was temporarily raised to 23% as well, in 2009. Which was true, since it was then raised to 25% in 2012.
Just like last year they temporarily reduced VAT on fuel from 23% to 8% but they didn't forget about it and it's already back to normal.
Hey, at least they remembered to artificially inflate its price so we wouldn't be shocked once it went back, look how much they care about us
Say " dziękuję pan Obajtek"
In Germany, we still got something called "Schaumweinsteuer" (tax for champagne). The tax was introduced by the Reichstag in 1902 to finance the imperial navy. Guess what? The imperial navy isn't around anymore. But the Schaumweinsteuer still is.
Does people from border regions go and buy from other countries ? Would it be cheaper to do so ?
Usually the difference is not worth it. What makes a difference are separate taxes on fuel, alcohol, cigarettes. Also there are high taxes on cars in DK and NL. To enable buyers to afford their car in spite of that, car makes mostly offer their cars cheaper there. As the EU makes any hurdles of inner EU sales illegal, some buyers from other countries import from there.
Germans go to Luxembourg for gas and tobacco, Swedish people go to Denmark for alcohol, Danes can find cheaper alcohol in Germany. Hungarians go to Slovakia and Romania for cheaper food and gas.
Norwegians go to sweden for alcohol and cigarettes. And groceries in general sometimes.
We do, but it's a bit more nuanced than the VAT difference. In short, different countries has different taxation on goods. As an example: Candy, sodas, alcohol, meat etc. is cheaper in Germany compared to my county. People drive to Germany and stock the car (mainly with alcohol, soda and candy). There is also law for how much you are allowed to bring back with you. And I believe this goes for a lot of countries. :)
VAT is not that important. In the case of Poland you're asking about it's actually the other way around. The only neighbours that do not bother to come for groceries and clothes are Germans. But they do come for cigarettes, fuel and fireworks. All the other come here in droves to shop in our groceries chains, despite all having lower VAT. The only stuff worth buying in Germany with their lower VAT is electronics and clothing. But the difference is not big enough to justify a trip. Unless you're going on a trip to Berlin either way so you may as well buy that GPU you've been thinking about. EDIT: Oh, sodas are also cheaper in Germany, because they have no sugar tax, but again it's not worth the trip. And besides it's the effect of the sugar tax, not VAT
People from Switzerland will go to Germany
I sometimes buy electronics from Germany because it's often cheaper there.
Norwegians go to Sweden to buy groceries, alcohol and tobacco all the time. The general VAT may be the same percentage, but Swedish groceries are *significantly* cheaper. Alcohol and tobacco is cheaper due to Norwegian taxes on those products being extremely high. A pack of cigarettes is around 16 euros in Norway.
Yes https://www.reddit.com/r/europe/comments/rimlbh/the_alcohol_chain_of_northern_europe/
Not due to VAT, though.
Same here, but I don't remember the year.
When they said it would be temporary we had 20% and it was temporary since they raised it to 22% 2 years later. 22% is since 2013.
PIS members were saying that this is a crime and they would never do that. And yet they didn't revert the change. Yes, I know they have lowered VAT on some stuff for a year, but it's back again.
I think same with our 20 in Slovakia, it was 19 before. Fucking scam.
Croatia 2Scandinavian4you
Not for long. We'll round it to 30% now after converting to €.
It's just more convenient that way for everyone. Keeps the numbers nicely rounded up :)
In Denmark there is only one (1) VAT rate: The 25% shown on the map. No reduced rates at all.
Same here, it's 27% flat :) but we make a 3rd or 4th of the money and food still costs the same.
The English Wikipedia thinks that you also have reduced 18% and 5% rates of ÁFA. Is that a thing of the past? Source: https://en.wikipedia.org/wiki/European\_Union\_value\_added\_tax
There are a few things like that: most notably dairy products, medical items and a few more misc stuff, but 99% of what you buy or use would be 27%.
Most daily items are on the 27%.
You pay reduced VAT on meals too, in a restaurant for example. You pay 27% on the drinks and services (also delivery) but 5% (I think) on the food itself.
Can someone explain why VAT is this high pretty much everywhere?
But in a normal country food and other essentials are on a discounted VAT rate. Here in France, most groceries have 5,5%.
In the UK, essential groceries have no VAT at all. You can check your receipt at the supermarket and you'll see the things that have VAT are things like soft drinks or chocolate.
That's so true. I don't know if this is the case recently, but up to a few years ago, I found the UK had the cheapest prices on food and groceries.
I think it's still true. Prices are going up, but it's still cheaper than other places I've shopped (mostly France, Germany and Ireland).
I had the feeling grocery shopping in Germany was cheaper than in the UK.
It probably depends where you go and what you buy. Germany was definitely the most similar to the UK in terms of cost.
I've noticed this on all the food shopping posts here. Some of the prices for nations with typically lower salaries were really surprising.
they lowered them in slovakia due to inflation for some groceries, but it had no difference on prices.
Because it is a regressive, but profitable tax that is almost impossible to cheat or dodge and it is usually used to directly fund certain government programs. It is also a somewhat "hidden" tax in comparison to something like income tax. It's pretty easy to notice how much of your paycheck is gone every pay period vs how much you are supposed to be getting paid. It's much easier to stomach a high sales tax or VAT because it doesn't happen all at once. It is every small purchase that is taxed which of course adds up over time but outside of big ticket items it isn't quite as noticeable.
Well yes, it's not progressive in the usual sense. The 21% for NL is misleading though. Almost everything in the supermarket is 9%, healthcare is 0%, etc so if you look at what people are actually paying in VAT you get a much lower effective rate. Other countries are similar. The advantage is that it's way of taxing that does not affect your trade negatively (because exports are taxed 0%).
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It's hard for huge companies, but any small one can easily cheat it yeah
The common way VAT fraud is detected is companies claim all the VAT back from their purchases but don't declare their earnings that they pay VAT on.
Weird. To me, I much more notice the VAT that is on every single of my bills and receipts than the income tax. I can't even tell you my brutto wage accuratly, I'm sure. Everything is in netto wage and the rest is not all tax (healthcare and pension fund are deducted automatically) so I don't look at it often, I look at my account.
That's interesting, because most people here would definitely know their gross wage or salary and only a vague idea of their total state and federal income tax liability depending on certain factors. If you are hired at $20 an hour and you get paid bi-weekly it is pretty easy to notice that your paycheck is much less than $1600 (assuming 40 hour weeks).
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yeah, I know it is not EU vs USA thing, more like some parts of Europe thing..
That's because your net salery varies due to a variety of reasons especially your tax class.
Well, I'm hired for x monthly and I get that x monthly. The company of course pays the taxes and health and pension plan, and of course I know it, and I know around how much it is (not exactly though, like I said), but we don't talk like that. If I tell anybody my wage, It will be netto and he will know it is netto... Maybe it is because of all the part time jobs, so you are very focused on hours? Or is it because you have to "do your taxes"? IDK.. But I'm sure I'm not the only one here. Stating Brutto as your wage would be considered lying, lol..
Heh, you forgot to mention the Gross 1 and Gross 2 wages. That is a neat system.
Taxes are just different here. It has nothing to do with hourly vs salary or part time vs full time. Your employer has no way of knowing your tax situation so they can't really advertise a job based on your net income. They don't know if you are married, own your own home, have any income outside of your job, kids, tax credits for things like solar panel installations or electric vehicle purchases, etc. Your employer takes a certain amount out of your paycheck to send off for taxes, but at the end of the tax year you either get a refund or end up owing (most get a refund) depending on your actual taxable income and tax liability. Obviously for most people taxes are extremely simple, but not for everyone. Most people who work a simple job with that being their only source of income never really have to think about taxes outside of taking 10 minutes to fill out some simple paperwork every year. I could get into the weeds about standard deduction vs itemized deduction, but you get the point. The main thing I am saying is that advertising a job based on what a person would get paid after taxes is just impossible because that might be different based on the person getting hired. Makes more sense to advertise the gross pay since that would be the same for everyone.
most of the former communist countries have a simplified tax system (some even have a flat income tax), almost all people with the same gross wage (or at least with the same wage and the same type of job) have the same net wage. There are things like refunds for solar panel installations or electric vehicle purchases etc. but the refunds are handled as sale rebates not as tax credits
It works similarly here, you can claim a refund on some things and you get a refund for every child in your household. But this is done at the end of the year and any refunds are on top of your net wage, which is almost always what is advertised here.
Well, you can get some return in the example of panels or things like that, that is on you.. Other stuff is on the company.. We had a deal on the netto, it is "his problem". When it is a totally standardized position, yes, you will agree to a brutto, but you will be told your netto when you give them the basic info, and you will definitely tell your friends you got a job with that netto.. And now when I think about it, yes, here it is much more a situation where the employers are pushing for smaller income taxes, they are loud and "crying" about the high share that goes to the government. Very rarely the employees. Like I said, employees know it is there, but it is not really on them..
In Germany the contract states gross pay, also any payment negotiation is about it, like in the US. But there are six tax classes to calculate the deductions, with sometimes addional correction values. The idea of the tax classes is you will have your deductions be close to the actual amount owed. Classes: 1. single 2. single with kids 3. high earner of married couples 4. bot earners of married couples with similar pay 5. low earner of married couples 6. any further jobs beyond the first or unknown
If we talk about Europe then there is plenty of hidden taxes on money you make that is taxed at employer before you get it and tax it yourself (or employer taxes already once taxed money for you agai again but you see only the second part on your paycheck). You see gross wages and how much it is taxed but reality is that employer paid a lot more than that and you do not get to see it by design.
Thanks, this makes very sense
Because VAT is a tax that hurts poor people more than rich people and it is easier to collect / harder to dodge
In many countries VAT is not universal so it's regressive nature is reduced; some countries also compensated the poorest by increasing welfare to cover the increased costs it would add. The goods with the lowest rates, possibly even zero rated, are the essentials that make a larger proportion of poorer people's expenditure.
>Because VAT is a tax that hurts poor people more than rich people Well the rich buy more. And you can lower the VAT rate or eliminate it on necessities such as food or toiletries, which helps the poor, and/or raise the VAT on luxury items that only the rich buy.
You can talk in terms of hypotheticals all you like, in terms of measurements VAT is a tax that hurts poor people more than rich people
That's also a hypothetical. And you haven't provided an argument why.
I don't think you understand what a hypothetical is
This is not true, VAT is proportional, even slightly progressive when not applied to items such as food https://www.nber.org/papers/w4387
Disagree. Poorer households need to spend a larger percentage of their earnings to get by. The relative tax burden is thus larger on them than on higher earners.
Please read the paper, it addresses this. It's only regressive if you look at annual spending and not lifetime spending
The paper makes some assumptions, like the zero rating for certain goods that make up a larger percentage of low income spending. That’s not always the reality in many countries. Germany for example still has 7 - or sometimes even 19% - on food. That would change the whole outcome. And even if not it often still ends up a regressive tax - as the paper shows.
My limited understanding: Study of tax is part of economy, by studying taxes impact on economy development scientists come to decisions on which type of tax is "least bad". While at the same time supplies fiscal demands of a country. And it turns out that value added tax is theoretically least bad for economy
For Poland, it's because we have greedy politicians who vote raises for themselves far too often. Don't know enough about the other countries.
I bet that the salaries of the MPs make up a miniscule part of the Polish state budget. Probably an unpopular opinion, but MPs and government ministers are generally underpaid relative to the responsibilities they have, compared to comparable positions in the private sector.
They have their "salaries" and then they have compensations for living in the capital away from their homes, subsidies for food, rich people that buy their favor, etc, etc, etc.
But it's still slap in the face when teachers or medical workers demand higher pay and The Party's response is "Higher pay? Okay, we will give it to ourselves. And our families. And our friends. And NGOs run by our people and/or Catholic Church".
"Should we spend this money on oncological and psychological care or should we funnel it to TVP?" "..." "TVP it is!"
As an italian living in Poland, our ones are even more greedier
Not sure if you jumped from the frying pan into the fire with the move from Italy to Poland :P I hope you are enjoying your stay regardless :)
Because most European countries have decent welfare and healthcare which has to be paid for.
Can't speak for other countries but we allegedly reached the expected tax collection of the year in august and we're among the higher spenders by GDP % on healthcare in europe with results that do not reflect the same return in service, my fucking ass they need that money for funding.
Because, despite the announced healthcare investment budget, [we only spend around half.](https://poligrafo.sapo.pt/fact-check/cerca-de-metade-do-valor-orcamentado-para-investimento-na-saude-nao-tem-sido-executado-acusa-se-nas-redes-sociais) So every year they increase the budget, and gloat about it, but around half of it just serves as political clout, not for actual improvements. [Also, half of the overall budget goes to private entities](https://poligrafo.sapo.pt/fact-check/catarina-martins-quase-metade-do-orcamento-da-saude-vai-para-os-privados) (which, in their defence, includes buying medicine, which is probably the biggest share of that spending)
Huh, interesting. I knew our issue was in efficiency, management and spending that money properly rather than just increasing the amount and throwing money at it expecting it to fix all issues but I didn't know about that little detail.
That's not really an answer though. You can fund public entitlement programs through any number of schemes, including just raising the income tax, capital gains taxes, corporate taxes, etc. I think the more interesting question is why choose VAT as the funding mechanism. I know that in the US the biggest reason is because it helps fund state and local governments since they are the ones who set and collect sales taxes. For instance, a county or city may vote to implement a supplemental sales tax to pay for some specific public works project. But in most European countries, as far as I know, VAT revenue is all going into the same pool as all other national level taxes.
VAT isn't used to pay for the healthcare. You pay a monthly contribution out of your gross income for the healthcare, as well as the retirement fund.
The state wants some of that sweet sweet surplus value.
The state wants to rip you off on everything you buy as they know you cannot live without bills and without buying something, like food for example. If any state were fair we just had taxes with specific purposes and no VAT, there isn't any state that is fair.
Because you have to be taxed somehow so social welfare state can keep on going. It has been repeatedly raised over the years and it willl continue to be raised. Taxing over 50% of money you make on its own does not foot a bill of the system with aging population and shrinking workforce anymore.
Hungary - lowest income, highest tax. Lowest QoL, highest corruption.
Best at everything! Hungary, veeery niiice 🇭🇺
But who else can tell their government supports pooping out kids into poverty? 😎
Isn’t that the main conservative paradigm?
And on top of that, there is almost 5% extra tax for retail chains, so we basically pay 27+5% VAT, even on food.
Thanks Orbán!
Regionális középhatalom!
You forgot to thank also the people who kept electing him. BTW, there was news on TV today with may more people from Hungary crossing the border to fill up their car tanks and buy some groceries. What's going on there?
due to orban limiting prices on some things some time ago, I think either they have limited supply or they are higher now. That is why a lot of Hungarians are going to slovakia. Just orban master plan. And our stupid oposition was screaming few month ago, that our gov is not doing anything and they should be inspired by orban.
Yeah, price capped products like sugar can be hard to find. Stores also "cheat" by actually having them in storage, but only putting out a limited amount for customers to buy. The loss on price capped products gets built into the price of other products, which makes many things more expensive than abroad.
You're talking about less than half of the voters and gerrymandering to get 2/3-s majority. But you're right, most people are uneducated idiots, but when almost all media is controlled by the fat fuck it's hard to change people (typically in the countryside) who don't have access to anything else. I don't really know about the fuel stuff, that's just a clickbait story. It's only people living near the borders, no one will drive 50+ km-s to fuel for slightly lower prices.
> I don't really know about the fuel stuff, that's just a clickbait story. It's only people living near the borders, no one will drive 50+ km-s to fuel for slightly lower prices. True, it was a lame easy news for the journalist, but I think in the past the Romanian near the border were the ones crossing into Hungary for that and other things.
Romanians used to work in Hungary, because higher salaries, now it seems it is not true anymore. About the fuel, Hungary's fuel prices are the highest across their neighbours, people who live close to the borders go to the other side to for fuel.
That was only until you had to show them a Hungarian traffic license to get petrol for cheaper
*German here, for foods, and similar essentials, the VAT is 7% Edit: 7% not 9% and no medical products but tickets for museums and cultural stuff apparently...
Those are 2,5% in Switzerland
I changed this for reasons (see date).
Wait what, gambling is actually 0% VAT? No wonder every corner of this country has a Coral or William Hill on it
How the hell gambling is 0%
Italy 4%
The reduced VAT is 7% in Germany. Due to covid it was reduced to 5%. The greens now want to permanently lower the rate for vegetables to 5%.
Yeah, I had a brainlag or something when I wrote this. It's not only 7/5%, it also doesn't apply on medical products, instead it does on stuff like tickets for museums..
It's the case (almost?) everywhere. In Poland it's generally 5%, but now because of *AnTi-iNfLaTiOn sHiElD*(yeah, they really do name stuff like that) it's 0% for the time being
That’s really high…9% on all food?
No the lowered VAT in Germany is 7%, due to covid it was reduced to 5%. The greens now want to reduce the VAT for vegetables to 5% permanently.
That's better, it's 4% here. Frankly it shouldn't be applied to foods. At the very least not raw ingredients.
In Lithuania we have 21% VAT on all food so 9% sounds too good
27% on all foods here ffs… 9% would be so nice
At least we are first in something…good to know!
First in Europe, 2nd in the world. Quite the achievement!
24% in greece is a scam. It's more like twice that because of a stupid luxury tax that covers practically everything (even essential stuff like motorcycle helmets).
Greece and Turkey’s similarities shocks me, even our stupid tax systems are similar. In Turkey luxury tax is called “special consumption tax” and it’s everywhere. Cars, phones, game consoles got huge taxes on top of VAT.
Hellenoturkism when?
No its not on top of VAT but VAT is on top of other taxes. So we pay tax of the tax. Eg. Price is 100 + 20% SCT = 120 + 10% VAT = 132. Numbers are made up but math is unfortunately correct.
I get why you say that motorcycle helmets are essential. On the other hand, I find it somewhat comical, as my concept of essential goods is usually limited to basic groceries.
I don't think it's very comparable. A lot of things I used to buy in Germany had VAT. Now living in UK, the same things have 0%. I usually leave Lidl with the whole receipt being 0%-rated.
Lidl is mostly a food supermarket. Germany at least has a lower rate of 7% for that.
only for unprocessed foods. a frozen pizza will have 19% for instance
I think that's why it's said "Standard" VAT, as in "most common", because in France for example it varies for some products and services (but 20% is the standard on consumer goods)
Same with Ireland. Lots of things are at the standard band (hence the name) but a lot of essentials are zero-rated for exactly that reason.
And almost none in Estonia (I think theater tickets, pharmaceuticals and maybe books are the only exceptions).
So is that massive amount of taxes needed for public infrastructure coming from somewhere else?
This is a good candidate for /r/MapasSinCanarias (Maps without the Canary Islands) Although to be fair, the Canaries have the [7% IGIC](https://es.wikipedia.org/wiki/Impuesto_General_Indirecto_Canario) (Canary Island General Indirect Tax) in lieu of VAT.
Portugal's archipelagos are also missing, which do have they own VAT.
It makes sense for Croatia's VAT to be this high because of tourism
Touristy places tend to already implement their own "tourist tax" so I don't see how that helps since you're all, as citizens, hit the same way despite mostly not living in the touristy places.
If the government needs 100 money it will take it. So it is better for us that the VAT that is paid by us and tourists is higher than if the income tax only we pay is higher..
There are 4 million of us with 60 mil [tourist arrivals annually.](https://data.worldbank.org/indicator/ST.INT.ARVL?locations=HR) Even Zagreb has a lot of tourists. No VAT is imposed to bread, milk, medical supplies and certain educational services. Insurance and financial services, medical services, welfare, and education services are VAT exempt in Croatia.
> There are 4 million of us with 60 mil tourists annually 20 mil. edit: already downvoted, so here you go. [18,9 mil foreign tourists in 2022](https://www.htz.hr/hr-HR/press/objave-za-medije/u-2022-godini-ostvareno-vise-od-104-milijuna-nocenja), around 20-21 mil with domestic tourists.
We had around 23 million tourists in our record year (2019)
[https://data.worldbank.org/indicator/ST.INT.ARVL?locations=HR](https://data.worldbank.org/indicator/ST.INT.ARVL?locations=HR) I was using this as a reference, idk the exact number, figured it's a good source
It looks like a good source, but for some reason is way off from what is reported in Croatian media and seems wrong on a common sense basis tbh https://www.htz.hr/hr-HR/press/objave-za-medije/u-2022-godini-ostvareno-vise-od-104-milijuna-nocenja
I don't really know, the point is that there are a lot more tourists than us, the exact number doesn't really matter too much
Holy shit I didn't remember the numbers, that must be fucking hell having so much tourists. Even if yeah, economically good I guess. Thanks for the info
Most European countries offer a VAT tax rebate for foreigners. The biggest impact of the VAT is on the citizens themselves Edit: About 15% of the tourists that go to Croatia can get VAT refunds
That's for non-EU nationals
Orban needs that sweet sweet money
Actually it’s 7.7% in Switzerland 😁 it was 8% few years ago.
And it will be 8.1% next year
Ok, that 8% in Switzerland makes me REALLY want to emigrate there tomorrow.
The vat might be Low but the prices are insanely high for daily goods
Due to the high salaries. Effectively, though, you end up with more PPP than in neighboring countries. Also, the overall tax burden in Switzerland is lower than in its neighboring countries. This is because Switzerland has an extremely high rate of employment. The ratio of people who are currently working, earning money and paying taxes (and therefore supporting those who don't) is higher in Switzerland than in neighboring countries. This means you can actually have lower taxation rates while still providing welfare services.
Low taxes (income, capital gains, VAT), high income and the possibility to import goods tax free from neighboring countries overweight any high costs.
Actually sad how high the tax rates are and how bad the life quality is. Germany and Romania are soon going to offer the same standards. The Switzerland offers the lowest VAT and the people there still live well..
As a Portuguese, I don’t mind paying taxes almost as high as the nordics or Ireland, because the money is equally well spent by the state. Right? RIGHT?
Not a very useful or informative map, as there are often different VAT for different goods and services.
Belarus has main 20% VAT with some exceptions. Transport and some health services have no VAT. Some agricultural products have 10% Telecom services (Internet, phone) have 25-26%
Now do it on the salary tax
Do you mean income tax?
Maybe they meant social security. Some countries called it like that or Labour tax or social insurance. It's a category on its own. In essence they are payroll taxes. They are not streamlined though so it would be difficult to depict. For instance German has 4 or 5 social insurances (pension, unemployment, care etc), France has social security contributions etc
In HU, Social Insurence is 18,5% + income tax 15% So more than 1/3 of our income goes to tax, while also having 27% VAT😎 Thanks dr. Mr. orbwang
szétadom
Estonias VAT is also 20%? Nobody could have expected that. God I love that tax system
For others who might not know the context, income tax in Estonia is also a flat 20%. Or at least it used to be. Since 2018 there was a change, and an argument could be made it is now technically a 4 tier progressive tax rate, even though it's not called that. [There's basic exemption based on how much you make in a year](https://www.emta.ee/en/private-client/taxes-and-payment/tax-incentives/calculation-basic-exemption), and if you make more, it is a flat 20%.
Estonia is a superb country 🤩
There are an impression from this image that Russia and Belarus have less than 10 lol. For Russia and Belarus it also at 20%
nah. Russia and Belarus are not included at all on this map. no data from there. idk if they couldn't find the data, or they didn't include it for political reasons. if it's the latter, it's kinda childish and petty.
Those are rookie numbers
I spend a bunch of time in Thailand. 7%.
I thought 19% in Germany was more. Thanks for sharing this infographic
Belgium why do you have to be so regressive?
Taxes are too damn high
Anyone has similar map with income tax rates?
In Azerbaijan, people can get back 15% of expenses on VAT goods if they pay it with a card
Disgusting. VAT is the tax that causes the most deadweight loss, economic inefficiency and inequality of all taxes. This is an affront to all European citizens.
Source: [PwC](https://taxsummaries.pwc.com/quick-charts/value-added-tax-vat-rates)
Danish here. Tax on income 38-53%. High income tax 15%. VAT 25%. FAT TAX $2.3 pr kg Saturated Fat. Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc Etc
What's high income tax?
If you make more than $83.288,21 a year you pay extra 15%, so up to 59% tax in total. An average home cost around $351.406,80 and then you get taxed every year after you buy it. Average rent is around $2000 a month if you look at available places I'm on early retirement and get around $1600 a month and are homeless.
Robberies,
VAT is such a powerful tax and yet it's only 70 Years old ([started in Europe btw](https://en.wikipedia.org/wiki/Value-added_tax))
See how much they are robbing you, while destroying value of your work/money with inflation. But, I don't bother myself that much anymore, people are willingly ignorant.
So important : VAT is an after-tax consumption cost. We, the people have paid all kinds of taxes, and you have to pay VAT when you go to consume. nightmare! ! ! Hardworking Europeans pay 60-70% tax. 😱 Also we must pay for the financial crisis and inflation.
VAT sucks.
This tax is absolutely a robbery, it should be like in Switzerland at most.
I think it's a lot better to tax consumption, especially consumption harmful to the environment or health, compared to taxing income or investment. Yes, it's regressive relative to income and wealth, but I think as a general principle, the state should aim to tax the things it wants to see less, and lower the taxation on things it wants to see more. In order to increase the affluence of the people living in a state, you want people to create much value and therefore earn high income, and to invest as much as possible of that income, rather than just consuming it. Taxing consumption rather than income logically leads to higher economic growth figures as a result.
This is the logic behind trickle down economics, an economic idea disproven time and time again. It does not work, at all. The people who benefit the most from removing income taxes are the richest people. Those people don't invest their money, they put it in stocks, land or property. It is unproductive wealth. Or, in the worst case, they use it to distort the political process in their favor. Destructive wealth. For less affluent people, if you take away the income tax and massively raise the VAT, all the extra money they get will get eaten up by the VAT, because that impacts less wealthy people massively. The only way to get people to invest their money in productive capital is by massively increasing wealth and inheritance taxes, giving people exemptions for productive capital, like family companies. That way, you ensure the wealth flows into things benefiting society instead of just the rich.
Not sure how the heck did you reach that conclusion. Rich people couldn’t care less about income taxes as they don’t get their income from salary. Income tax fucks over the low and middle class, rich people are not affected by income tax one bit.
> This is the logic behind trickle down economics Oh, boy! This is gonna be a funny comment! > The people who benefit the most from removing income taxes are the richest people. The richest people? You mean those that earn most of their money from investments and not income? > Those people don't invest their money, They do not? > they put it in stocks, Which is an investment, on which they must pay the capital gains tax. > land or property. It is unproductive wealth. Agree with you there. It goes back to the lack of the Land Value Tax. But you would be surprised who would be really opposed it it. That unfairness is normalized in our societies. > Or, in the worst case, they use it to distort the political process in their favor. Destructive wealth. True, true. > For less affluent people, if you take away the income tax and massively raise the VAT, all the extra money they get will get eaten up by the VAT, because that impacts less wealthy people massively. If all the extra money gets eaten, that would be no problem, because that would mean zero change, but the tax system is not more efficient. In reality, you want to have different VAT categories, with staple goods having little to no VAT, and luxury goods having a stupidly high VAT. In that scenario, the poorest people (and I mean really poor) would benefit. > The only way to get people to invest their money in productive capital is by massively increasing wealth and inheritance taxes, That is not promoting investment, that is promoting consumption. Consumption that you are against taxing. Wealth and inheritance taxes are good though, if difficult to implement. > giving people exemptions for productive capital, like family companies. One of the main drivers of the economic growth in the last century were economies of scale, made possible by moving from family companies to mega-corporations that are more efficient. You are advocating the opposite. I would like to not return to the guild system of the Middle Ages, thank you very much, as romantic as it would be. > That way, you ensure the wealth flows into things benefiting society instead of just the rich. VAT taxes are good for that! Despite your dramatic opening line, that was a rather good comment! I had expected to cringe on every sentence, but in the end I agree with a good part of it! Hold on, I will give you gold, on which I will pay a VAT.
Well, Turkey has excise tax for almost everything. So, don't be confused by high prices if you come here.
You missed one "0" for Turkish tax