“Value Added Tax”, (i.e. VAT)

Started by Supposn, November 05, 2013, 08:56:49 PM

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Supposn

"Value Added Tax", (i.e. VAT) is a particular and superior method of administrating a sales tax.

Unlike prior (conventional) sales tax methods, VAT never taxes any prior levied taxes carried forward from prior sales transactions. Within a chain of sales links, the tax levied upon the purchaser within any transaction link is government's total revenue realized up to that particular point within the chain of transactions.

Unlike other sales tax methods, enterprises reduce their amounts of VAT collected by the VATs they've paid, and only pass the difference on to the government. There is little advantage or reason for intermediate purchasers to request the seller not record a sales transaction.

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VAT's particularly suitable for global trade.
Governments waive taxes upon their exports, but they can only do so to the extent that they're able to identify specific amounts of taxes levied upon the products within each of their export shipments.

VAT levied within the export sales' transaction are the entire VAT (from all prior and the export link within the chain of sales transactions that can be identified and attributed to a shipment of exported goods.
The prices of exports from VAT nations are reduced by the greatest amounts.

In the case of a non-VAT nation, only sales taxes from the export transaction itself can be identified. The prices of exports are reduced by lesser amounts.

Other than sales taxes of any kind, there are few if any other taxes that can e identified and be attributed to the products within an export shipment.

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[Excerpted from
" http://www.brookings.edu/papers/2010/0722_vat_gale.aspx ".

The key distinction is that VATs are collected at each stage of production, whereas retail sales taxes are collected only at point of final sale. As a result, the VAT is easier to enforce and is widely regarded as having a superior administrative structure to a retail sales tax".
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What's apparently the "final point of some goods or service products' sales may not be that in every case.  I suppose the final case of an auto vehicle's sale is after any salvaged parts have been sold and the remainder of the vehicle is reduced to a cube of crushed steel.  There are a great many transactions between auto producers' purchases of goods and services and their vehicles' apparent points of final sales. 

Most state's tax collecting bureaucracies collect many taxes upon previous intermediate transaction prior to that apparent last transaction.  The distributions of those steel cubes are additional taxable services within most state's sales tax laws.
VAT is the only sales tax administrative method which assures that nothing will be taxed more than once.

Respectfully, Supposn

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Solar

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Supposn

VAT is the only sales tax administrative method which absolutely assures that items' aggregate net tax revenue will not exceed the taxes paid by final purchasers;

Vat taxes cost no more and generally less to any other sales tax method to effectively administer and enforce;

VAT's an improvement of other sales tax methods affects upon businesses cash flow, enterprises reduce any Vat they may have paid prior to passing on their collected Vats to the government;

Similar to all national sales taxes, importers of foreign goods pay their full share of VAT and thus would be of LESS advantage over USA enterprises.
Due to VAT, European common market's sovereign nations, (unlike USA's sales taxing states) each seamlessly receives their full share of VAT revenues without putting their own nations' enterprises at any disadvantage.
If there were a USA federal Vat, state's sales tax collectors could "piggyback" upon it in the same manner as state income tax collectors currently enjoy less collection costs and lost revenue by "piggybacking upon USA's federal income tax systems;

VAT compared to any other sales tax method, is not of a single disadvantage and other methods are not of a single advantage to VAT.

VAT nations benefit from its lesser than other sales tax methods "shrinkage" due to tax evasion or fraud.  Vat's no more and generally less expensive to effectively administer and enforce.
Many governments have transformed from other sales tax methods to VAT.  Vat is now the most common sales tax method used by other nations.  I'm unaware of any government that has transformed their VAT to any other sales tax method.

Respectfully, Supposn

Solar

Quote from: Supposn on November 14, 2013, 06:16:29 AM
VAT is the only sales tax administrative method which absolutely assures that items' aggregate net tax revenue will not exceed the taxes paid by final purchasers;

Vat taxes cost no more and generally less to any other sales tax method to effectively administer and enforce;

VAT's an improvement of other sales tax methods affects upon businesses cash flow, enterprises reduce any Vat they may have paid prior to passing on their collected Vats to the government;

Similar to all national sales taxes, importers of foreign goods pay their full share of VAT and thus would be of LESS advantage over USA enterprises.
Due to VAT, European common market's sovereign nations, (unlike USA's sales taxing states) each seamlessly receives their full share of VAT revenues without putting their own nations' enterprises at any disadvantage.
If there were a USA federal Vat, state's sales tax collectors could "piggyback" upon it in the same manner as state income tax collectors currently enjoy less collection costs and lost revenue by "piggybacking upon USA's federal income tax systems;

VAT compared to any other sales tax method, is not of a single disadvantage and other methods are not of a single advantage to VAT.

VAT nations benefit from its lesser than other sales tax methods "shrinkage" due to tax evasion or fraud.  Vat's no more and generally less expensive to effectively administer and enforce.
Many governments have transformed from other sales tax methods to VAT.  Vat is now the most common sales tax method used by other nations.  I'm unaware of any government that has transformed their VAT to any other sales tax method.

Respectfully, Supposn
Only a progressive would believe that shit, for me or anyone else to say it, they would have to outright lie. Just because you say it, does not make it so.
There is absolutely nothing about a VAT that is cost saving, every step of production has to be assessed a value, a very costly process for the producer, one more huge govt creep into private industry, one more bureaucrat hired to oversee a business complies.
I explained it to you in another thread, so I'll re-post it since you so conveniently ignored it there.

Quote from: Solar on November 07, 2013, 07:25:11 PM
As we sit today, when I buy a product from my manufacturer, he has my tax ID on file, he sends me my order, my distributors order from me, I send the product on to them, they sell it to their retailers, who pay the tax.

In your system, every part is taxed, once assembled, it is given a value, and an additional tax, the part is then sold to another manufacturer, he applies the part to his product, which again needs to be evaluated and a tax is applied accordingly, he then sells his end product to another who installs it in his product, again, a govt agent has to valuate it's worth.
This process continues on till the final sale, where the purchaser just paid an additional 20 to 30% increase in cost because of all the added govt assessors.

And you don't see a problem with this? The govt is in your books every step of the way, that is not freedom, that is socialism!
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Supposn

Quote from: Solar on November 14, 2013, 06:40:25 AM
Only a progressive would believe that shit, for me or anyone else to say it, they would have to outright lie. Just because you say it, does not make it so.
There is absolutely nothing about a VAT that is cost saving, every step of production has to be assessed a value, a very costly process for the producer, one more huge govt creep into private industry, one more bureaucrat hired to oversee a business complies.
I explained it to you in another thread, so I'll re-post it since you so conveniently ignored it there.

Solar, your less than elegant language doesn't make your position any more logical.
Enterprises appreciate reducing the VAT that they pass back to the government by any Vat they've paid in the course of their business.  It speeds up their cash flow.
VAT certainly is not more expensive or less effective than any other sales tax method.
Unlike prior conventional sales tax methods, there is no motivation for purchasers participating in intermediate links of commercial transaction chains to ask that the transaction not be recorded and the sales tax be evaded.  This increases compliance and reduces enforcement expenditures.  That's why nations that have transferred their sales tax methods retain VAT and will not return to their previous sales tax methods.

[I'm aware of the waiving of sales taxes for purchasers providing their tax ID numbers but in daily practice many of enterprises' operating in the field cannot stop and deal with the niceties of tax IDs.  Things just move to fast in the field and everyone cannot carry the proper forms and documentation in every vehicle they use].

Again I ask are you a proponent of any tax method for us to obtain sufficient tax revenue and has a reasonable expectation to ever be an enacted into federal law?

Respectfully, Supposn

TboneAgain

Quote from: Supposn on November 14, 2013, 12:30:45 PM
Solar, your less than elegant language doesn't make your position any more logical.
Enterprises appreciate reducing the VAT that they pass back to the government by any Vat they've paid in the course of their business.  It speeds up their cash flow.
VAT certainly is not more expensive or less effective than any other sales tax method.
Unlike prior conventional sales tax methods, there is no motivation for purchasers participating in intermediate links of commercial transaction chains to ask that the transaction not be recorded and the sales tax be evaded.  This increases compliance and reduces enforcement expenditures.  That's why nations that have transferred their sales tax methods retain VAT and will not return to their previous sales tax methods.

[I'm aware of the waiving of sales taxes for purchasers providing their tax ID numbers but in daily practice many of enterprises' operating in the field cannot stop and deal with the niceties of tax IDs.  Things just move to fast in the field and everyone cannot carry the proper forms and documentation in every vehicle they use].

Again I ask are you a proponent of any tax method for us to obtain sufficient tax revenue and has a reasonable expectation to ever be an enacted into federal law?

Respectfully, Supposn

Here I was gonna ask you for ideas for a major book on economics, and you just went ahead and kicked 'em out there. What a guy!

The conversation you seem to want can't take place unless and until you define some terms. What does "sufficient tax revenue" mean? Who decides what is "sufficient?" What does that revenue, however derived, need to be "sufficient" for? Who defines "revenue?" How do you define a "reasonable expectation" of enacting anything? Does it have to be a sure thing? An 80/20 shot? a 50/50 chance?

You can't expect anyone to take you seriously if all you do is blabber. I might write a book based on your questions. But I wouldn't waste my time waiting for two-sentence answers on this or any other board.
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. -- Tenth Amendment to the US Constitution

Government is not reason; it is not eloquent; IT IS FORCE. -- George Washington

Supposn

Quote from: TboneAgain on November 14, 2013, 12:56:51 PM... The conversation you seem to want can't take place unless and until you define some terms. What does "sufficient tax revenue" mean? ...But I wouldn't waste my time waiting for two-sentence answers on this or any other board.

Bone Again, You have written a 10 line reply to evade the question of what, (if any) tax method for us to obtain sufficient tax revenue and has a reasonable expectation to ever be an enacted into federal law?

You're questioning my use of the word 'sufficient?   Provide your own alternative definition of the word.

Respectfully, Supposn

Solar

Quote from: Supposn on November 18, 2013, 02:13:35 AM
Bone Again, You have written a 10 line reply to evade the question of what, (if any) tax method for us to obtain sufficient tax revenue and has a reasonable expectation to ever be an enacted into federal law?

You're questioning my use of the word 'sufficient?   Provide your own alternative definition of the word.

Respectfully, Supposn
How about one fourth of what they're stealing from us now?
You fail to understand that the Fed is living far beyond it's necessary means, as well as the behemoth the Founders warned it could become, in the process destroying Liberty.

I honestly do not understand your advocacy for bigger Govt., it boggles the mind.
Are you not for Independence, can you not function without govt supporting you, are you not self sufficient?
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TowardLiberty

Straight from the horse's mouth...
QuoteThe VAT is essentially a national sales tax, levied in proportion to the goods and services produced and sold. But its delightful concealment comes from the fact that the VAT is levied at each step of the way in the production process: on farmer, manufacturer, jobber and wholesaler, and only slightly on the retailer.

The difference is that when a consumer pays a 7 percent sales tax on every purchase, his indignation rises and he points the finger of resentment at the politicians in charge of government; but if the 7 percent tax is hidden and paid by every firm rather than just at retail, the inevitably higher prices will be charged, not to the government where it belongs, but to grasping businessmen and avaricious trade unions.

While consumers, businessmen, and unions all blame each other for inflation like Kilkenny cats, Papa government is able to preserve its lofty moral purity, and to join in denouncing all of these groups for "causing inflation."

It is now easy to see the enthusiasm of the federal government and its economic advisers for the new scheme for a VAT. It allows the government to extract many more funds from the public — to bring about higher prices, lower production, and lower incomes — and yet totally escape the blame, which can easily be loaded on business, unions, or the consumer as the particular administration sees fit.
http://mises.org/daily/4296

Solar

Quote from: TowardLiberty on November 18, 2013, 06:23:40 AM
Straight from the horse's mouth...http://mises.org/daily/4296
Fascinating! Thanks TL, I'd never considered the shield effect that Big Govt would glean under VAT.
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TboneAgain

Quote from: Solar on November 18, 2013, 04:16:58 AM
How about one fourth of what they're stealing from us now?
You fail to understand that the Fed is living far beyond it's necessary means, as well as the behemoth the Founders warned it could become, in the process destroying Liberty.

I honestly do not understand your advocacy for bigger Govt., it boggles the mind.
Are you not for Independence, can you not function without govt supporting you, are you not self sufficient?

Exactly. Is $1 trillion sufficient? $4 trillion? Who gets to decide what is sufficient? More importantly, how come WE don't get to decide?

Our federal government is vastly overblown and overgrown. It has been expanding beyond its legal bounds for over a century.
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. -- Tenth Amendment to the US Constitution

Government is not reason; it is not eloquent; IT IS FORCE. -- George Washington

Solar

Quote from: TboneAgain on November 18, 2013, 07:26:53 AM
Exactly. Is $1 trillion sufficient? $4 trillion? Who gets to decide what is sufficient? More importantly, how come WE don't get to decide?

Our federal government is vastly overblown and overgrown. It has been expanding beyond its legal bounds for over a century.
Bingo!
One would think that 7 trillion over budget in 6 short years would be worrisome, while others think we're somehow shortchanging govt in revenue.
Never once considering we have too large a govt now, with 100s of duplicate agencies doing virtually the same thing, wasting tax dollars.
Yet here we have supposn advocating for an even bigger govt bureaucracy. Does reality ever sink in?
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TboneAgain

Quote from: Solar on November 18, 2013, 07:36:02 AM
Bingo!
One would think that 7 trillion over budget in 6 short years would be worrisome, while others think we're somehow shortchanging govt in revenue.
Never once considering we have too large a govt now, with 100s of duplicate agencies doing virtually the same thing, wasting tax dollars.
Yet here we have supposn advocating for an even bigger govt bureaucracy. Does reality ever sink in?

I think that it's fair to say that the US federal government has become every bad thing Hamilton and Jefferson and Madison and Washington feared it could be. And then some.

In a way, I think we're still paying for the horrid mistake of slavery. The issue helped to fuel the Civil War, and that war, if it did nothing else, established the (false) principle that the national government is supreme over the states, that the individual states could not and must not survive on their own.

Yep, I'm a Tenther, and damned proud of the fact.
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. -- Tenth Amendment to the US Constitution

Government is not reason; it is not eloquent; IT IS FORCE. -- George Washington

kopema

Quote from: Solar on November 18, 2013, 04:16:58 AM
QuoteYou're questioning my use of the word 'sufficient?   Provide your own alternative definition of the word.
How about one fourth of what they're stealing from us now?

Now that the government is borrowing trillions of dollars a year from itself, and has co-opted America's largest industry, it's important to note that the word "stealing" includes a lot more than just taxes.

An eighth of what the federal government is currently SPENDING would be far more than sufficient to fulfill its Constitutional obligations.
''It is not the function of our government to keep the citizen from falling into error; it is the function of the citizen to keep the government from falling into error.''

- Justice Robert H. Jackson