Many EU countries have a “VAT” and like feel like this is kinda targeting poor people. Like, for the rich, this is insignificant, for poorer people, a (example) 20% tax would be a huge burden. Why do they do this?
🤔
Many EU countries have a “VAT” and like feel like this is kinda targeting poor people. Like, for the rich, this is insignificant, for poorer people, a (example) 20% tax would be a huge burden. Why do they do this?
🤔
So basically, you can only tax so much before the rich get mad and leave the EU? 🤔
No, you can only tax the rich so much because a lot of the money is laundered through internationally sanctioned loopholes. There was a plan for that, but then some morons elected Trump so now that’s probably not happening.
But sales tax still works for that, since if you want to buy a Ferrari we’re keeping 20% automatically at the point of sale.
And since rich people tend to spend more money than poor people, sales tax is more regressive than other taxes, but not as much as one would think.
But sales tax still works for that, since if you want to buy a Ferrari we’re keeping 20% automatically at the point of sale.
Unfortunately, that is very easy to circumvent. Rich people usually own companies which made them rich in the first place. They can easily buy cars in the company name and write not just the VAT off, but income taxes as well.
That is true with or without VAT. VAT isn’t paid by the buyer, either. It’s the seller that makes the VAT payment.
So sure, the rich asshole may try to write off the Ferrari in their business tax, along with all the other loopholes (good luck with that, too-- I’ve gotten audited for much less), but 20% of that cost still went into taxes because the dealership paid in their VAT every three months like a good boy. That’s the entire point.
VAT dodging is an art and a science for contractors of all stripes and other grey economy actors, but if you’re a standing business like, say, a former Fiat subsidiary with a large worldwide business headquartered in Italy, VAT is the one tax you don’t get to mess with because it’s baked into every invoice.
More like the rich will get even more proficient in tax avoidance
No, EU member states handle taxes individually.
But, that ease of travel is one inducement. (Consider, as billionaire Spaniard learns the government plans to tax an additional 100 million euros. With no border, is moving a few km next door to Portugal worth a 100 million?
More meaningful though is business taxes/regulations, which are a large part of why Europe has lost so many Unicorns to the NYSE and why within America, Texas is kind of killing it in terms of business relocations.
I personally think it’s a race to the bottom but those are the constraints that exist.
No