Quote from: Supposn on December 27, 2013, 11:07:10 PM
Dan, you're correct; I'm drifting off the topic.
But so many of the replies to this thread are not germane to general sales tax administration.  I finally replied to towardLiberty's post which made an inquiry that has been implied by other members' posts addressed  to me.

Even the topic itself, a comparison of VAT to prior enacted methods of administrating general sales taxes is less an economic subject and more of a financial accounting discussion.  The pertinent economic point is tax revenues based upon the monetary values of persons' eventual purchases and trades rather than what's the determinations of persons' and other entities' net incomes.
.
VAT was rather recently introduced.  Since its first enactment (other than possibly within the USA), I do not believe any government has chosen other than VAT when enacting a new sales tax.  Some governments have gone to the expense and inconvenience of transforming their prior sales taxes to a VAT method of administration and I'm unaware of any government changing their opinion and transforming from VAT to any other method of general sales tax.  That's not random coincidence but a clearly due to those governments' legislators acceptance of VAT's superiority to all other methods available.

The choice between Vat and other sales tax methods is among the very few political determinations where the differences of all individual  factors are not simply an aggregate  net advantage to one side rather than the other but almost ALL, if not ALL individual factors are of  advantage to that same side of aggregate net advantage.  That's what I meant when I wrote that the comparison of Vat to other sales tax methods is a completely one sided.

Respectfully, Supposn

I am a accountant by education and training with over 20 years experience. I have done payroll, income and sales taxes of all kinds. And I can tell you the VAT is a more complicated, cumbersome means of taxation when compared to a more traditional sales tax. Why do governments like it? It is less transparent to the end consumer and it gives the government more bites at the apple. That's it. There is more reporting required, more complex reporting and the compliance costs are much higher. I repeat, there is no administrative value to doing VAT over traditional sales tax.

The only way this is preferable is if you believe the problem is that government does not tax people enough and if we could just tax the productive segments of our society more then we could reach some secular progressive nirvana. 

Quote from: Dan on December 28, 2013, 04:40:01 AM
I am a accountant by education and training with over 20 years experience. I have done payroll, income and sales taxes of all kinds. And I can tell you the VAT is a more complicated, cumbersome means of taxation when compared to a more traditional sales tax. Why do governments like it? It is less transparent to the end consumer and it gives the government more bites at the apple. That's it. There is more reporting required, more complex reporting and the compliance costs are much higher. I repeat, there is no administrative value to doing VAT over traditional sales tax.

The only way this is preferable is if you believe the problem is that government does not tax people enough and if we could just tax the productive segments of our society more then we could reach some secular progressive nirvana. 

In two paragraphs you successfully debunked what Supposn has spent days and page after page of posts supporting. Thanks. 

Quote from: Supposn on December 27, 2013, 11:07:10 PM
Dan, you're correct; I'm drifting off the topic.
But so many of the replies to this thread are not germane to general sales tax administration.  I finally replied to towardLiberty's post which made an inquiry that has been implied by other members' posts addressed  to me.

Even the topic itself, a comparison of VAT to prior enacted methods of administrating general sales taxes is less an economic subject and more of a financial accounting discussion.  The pertinent economic point is tax revenues based upon the monetary values of persons' eventual purchases and trades rather than what's the determinations of persons' and other entities' net incomes.
.
VAT was rather recently introduced.  Since its first enactment (other than possibly within the USA), I do not believe any government has chosen other than VAT when enacting a new sales tax.  Some governments have gone to the expense and inconvenience of transforming their prior sales taxes to a VAT method of administration and I'm unaware of any government changing their opinion and transforming from VAT to any other method of general sales tax.  That's not random coincidence but a clearly due to those governments' legislators acceptance of VAT's superiority to all other methods available.

The choice between Vat and other sales tax methods is among the very few political determinations where the differences of all individual  factors are not simply an aggregate  net advantage to one side rather than the other but almost ALL, if not ALL individual factors are of  advantage to that same side of aggregate net advantage.  That's what I meant when I wrote that the comparison of Vat to other sales tax methods is a completely one sided.

Respectfully, Supposn

And this is why you fail on every level, TAX is an economic issue, it directly effects the economy, on a macro level to micro level, to the individuals bank account, how he he plans his retirement, his purchases, new or used.
Taxes can either exist quietly alongside an economy, or kill it altogether, and VAT is a stifling method to enact on a free mkt economy.

Your comparative analogy of aggregation is pure nonsense as compared to one that has but one piece, an end of sale transaction.
Adding a 300% level increase of bureaucracy is mind numbingly stupid, this is why you have been challenged on your basic knowledge of economics.

Apply your comparative analysis to that of a child's lemonade stand, she makes the lemonade, sells it, taxes the standard rate and turns it over to the state.
In a VAR system, she has to record every step of production, from time spent buying the lemons, crushing them, adding sugar, which must be listed as well,  and total time accrued for a final product, and instead of a simple 7% sales tax, she had an accumulated total nearing 30% of the over all product.

Granted, that would never happen, but it's an illustration of the added time and secondary labor needed to track such expenditures.

So we ask again, what makes you an authority on the subject, or are you just a drone proponent of socialism with absolutely no understanding of economics?

Quote from: Dan on December 27, 2013, 05:39:00 PM
Actually asking yourself if you are Keynsian or Austrian is a pretty simple question and it's discussed in the media and political circles. I know kids in their early 20s who can state their position clearly. Why can't you do the same?

Who says I can't?

Quote from: Dan on December 27, 2013, 05:40:42 PM
If I had spent pages upon pages of pontificating and telling other people how to think relative to economics, then I would be a little ashamed to admit I was ignorant of such a basic point.

What are you talking about?

Quote from: TowardLiberty on December 28, 2013, 07:09:57 AM
What are you talking about?

Supposn

Quote from: walkstall on December 28, 2013, 07:20:20 AM
Supposn

You would think but it seems like he is addressing it to me...

Confusion abounds.

Quote from: TowardLiberty on December 28, 2013, 07:08:59 AM
Who says I can't?

Are you saying it's more of a won't than a can't? 

Quote from: Dan on December 28, 2013, 04:40:01 AM
I am a accountant by education and training with over 20 years experience. I have done payroll, income and sales taxes of all kinds. And I can tell you the VAT is a more complicated, cumbersome means of taxation when compared to a more traditional sales tax. Why do governments like it? It is less transparent to the end consumer and it gives the government more bites at the apple. That's it. There is more reporting required, more complex reporting and the compliance costs are much higher. I repeat, there is no administrative value to doing VAT over traditional sales tax.

The only way this is preferable is if you believe the problem is that government does not tax people enough and if we could just tax the productive segments of our society more then we could reach some secular progressive nirvana.

Dan, you obviously haven't been practicing your profession within a VAT nation, which are (I suppose) all major nations other than the USA.


Among USA's disadvantages in global trade is our lack of a federal sales tax.  Other nations, (I suppose all major nations) have a national sales tax that significantly contributes to their total tax revenues.

Importers of products into those nations are required to fully contribute to those nation's aggregate tax revenues; thus denying imports a possible tax advantage over those nation's domestic product producers.
Additionally those nations, (as I suppose all governments) waive taxes upon products exported from their jurisdiction to alleviate tax burdens upon their exports.

Only the taxes that are explicitly levied upon a product can be identified.  Only identified taxes can be waived.  That's among the reasons why since VAT has become the conventional sales tax method, no nation has enacted or transformed a tax to any be a sales tax administered in any method other than VAT.

The explicitly stated amount of VAT upon a product is absolutely the entire VAT revenue applied to that product (regardless of how many VAT jurisdictions or transactions the products' components and/or the entire products have passed through.

Respectfully, Supposn

Quote from: Supposn on December 28, 2013, 09:33:37 PM
Dan, you obviously haven't been practicing your profession within a VAT nation, which are (I suppose) all major nations other than the USA.


Among USA's disadvantages in global trade is our lack of a federal sales tax.  Other nations, (I suppose all major nations) have a national sales tax that significantly contributes to their total tax revenues.

Importers of products into those nations are required to fully contribute to those nation's aggregate tax revenues; thus denying imports a possible tax advantage over those nation's domestic product producers.
Additionally those nations, (as I suppose all governments) waive taxes upon products exported from their jurisdiction to alleviate tax burdens upon their exports.

Only the taxes that are explicitly levied upon a product can be identified.  Only identified taxes can be waived.  That's among the reasons why since VAT has become the conventional sales tax method, no nation has enacted or transformed a tax to any be a sales tax administered in any method other than VAT.

The explicitly stated amount of VAT upon a product is absolutely the entire VAT revenue applied to that product (regardless of how many VAT jurisdictions or transactions the products' components and/or the entire products have passed through.

Respectfully, Supposn

I understand how a VAT works and I am pretty sure that I am better qualified than you to say it is a more complicated, less transparent, more costly tax than a traditional sales tax.

All you are falling back on is saying everyone elseis doing it. That doesn't make it less complicated. That doesn't make it more transparent. That doesn't make it less intrusive. The details of your argument do not disprove my point even though you seem intent on presenting them as if they do.

Try reading what you post before you post it because this is just a waste of my time.

Quote from: Dan on December 28, 2013, 03:20:10 PM
Are you saying it's more of a won't than a can't? 

It's neither.

I am always more than willing to pontificate at length about economic theory.

No one has asked which camp I belong in because they already know.

Quote from: Supposn on November 05, 2013, 08:56:49 PM
"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.

///////////////////////////////////////////
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.

///////////////////////////////////////////////////////////////////////////////////////////
[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".
///////////////////////////////////////////////////////////////////////////////////////////

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

I have zero idea whether it is superior.  I NEED THE NUMBERS--and so do you!

Superior is a subjective term. Something liberals love.

1. Compliance costs will be higher because the reporting is more involved.
2. It will be less transparent like all forms of corporate taxation. At the end of the day you will not be able to tell which portion of your payment for a product or services is related to taxes and that is exactly how liberals like it.
3. It gives the government multiple bites at the same apple which means far more potential or a higher efffective rate of taxation. Once again, just how liberals like it.

Are you seeing a trend here?

Quote from: Dan on December 31, 2013, 02:36:52 AM
Superior is a subjective term. Something liberals love.

1. Compliance costs will be higher because the reporting is more involved. ...

Dan, you're incorrect; Vat compliance is not more involved.

Within NY State's, (and I suppose all other USA sales taxing states'), enterprises are required as (registered agents of the state) to collect, report and pass on all required state sales taxes due to the enterprises sales.

NY enterprises selling products do not collect sales taxes for goods and service products sold to foreign, (i.e. non-NY State) purchasers and delivered or transported beyond the borders of the state.  They also do not collect sales taxes from purchasing enterprises that due to their selling goods or service products), have and provide their NY State's sales tax (waiver) IDs to the NY enterprises they purchase products from.

NY State enterprises (that are act as registered agents of the state) pass on to the state all of the sales taxes they are required to collect from their customers.  Quarterly sales tax returns include the enterprises' reporting their gross pre-sales taxed sales volumes and the subtotals of those sales from which sales taxes were waived; (i.e. in this manner NY State monitors all sales transactions throughout their state).

Although individual sales transaction documentation are not required to be presented when reporting and passing on sales tax revenues to their state's tax administrators, enterprises' as a practical matter retain sales transactions' data if they have need to lend credence for their individual enterprise's reported sales tax returns.

I suppose the administrative method of sales tax administration is similar to almost all, (if not all) governments using any, (including VAT) methods of general sales taxing.

While NY State enterprises waive sales taxes to purchasers offering their tax waiver ID's, Great Britain's enterprises' collect their entire VAT and immediately deduct their paid VAT from the revenue they pass on to their nation's treasury department.

The compliance administration expenditures of enterprises subject to VAT are not greater than that of NY sales taxed enterprises.  VAT levying governments enjoy lesser than other sales taxing losses due to tax evasion and/or greater tax revenues in proportion to their sales tax administration and enforcement expenditures.

There's good reason to believe NY State would benefit from transforming their sales tax methods to a VAT system.  I'm confident if an originally enacted federal sales tax is not a VAT, in the future it would be transformed to VAT; its superiority cannot forever be denied or detained.

Respectfully, Supposn

Quote from: Dan on December 31, 2013, 02:36:52 AM
Superior is a subjective term. Something liberals love. ...
... 2. It will be less transparent like all forms of corporate taxation. At the end of the day you will not be able to tell which portion of your payment for a product or services is related to taxes and that is exactly how liberals like it.
3. It gives the government multiple bites at the same apple which means far more potential or a higher efffective rate of taxation. Once again, just how liberals like it.

Are you seeing a trend here?

Dan, Similar to NY State's sales tax, there's no reason that an enacted VAT could not be drafted as to require the amount and rate of sales tax be explicitly itemized upon sale transactions' billing invoices and receipts.  The concept of VAT itself is not any more or less transparent than any other method of general sales tax.

Unlike ALL other methods of sales tax I'm aware of, the sales tax paid within any VAT links of sales transaction chains are up to that link's time, reflect the entire net tax revenues received by all VAT government jurisdictions regardless of the numbers of VAT sales transactions or jurisdictions the sales items have been passed through.

We apparently perceive a different trend.

Respectfully, Supposn