GreyianStorm said:
DM235 said:
GreyianStorm said:
Have you seen the debt of the US? It makes other countries look like perfect countries.
Also, VAT is just an alternative to Sales Tax. They aren't meant to both be used together. FYI: If sales tax and VAT are equal, people will pay way less in taxes at retail under the VAT system.
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Please explain that logic.
A $300 item with 10% VAT would sell for $330 at retail with the consumer not being shown the original item's price.
A $300 item with 10% sales tax would sell for $300 + $30 tax for a total of $330.
$330 = $330.
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If the sales tax used is Gross Receipts Tax, tax builds on every level of the sale (manufacturer -> wholesalers -> retailers -> consumers), at 10% (just taking your 10% value). So you end up with the product having ~33.5% tax rate is effect.
VAT only taxes the added value, so the total amount of tax paid = 10% of the final purchase price (well, actually slightly less than 10%, because the final price = non-tax price + 10% tax).
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I think it's safe to assume that most major retailers would buy directly from the manufacturer to save on the wholesaler markup. And I thought that retailers get to write off silly things like taxes. I could be wrong on that though.
I was always under the impression that VAT was the sole reason prices in Europe were higher than North America (aside from potential import taxes, but I don't think these apply to electronics in most cases in Europe).
