10-11-2004 03:01									#301
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quote: Originally posted by DAVOUT In the standard AVT system, exports are not charged with AVT, and imports are in the same rate that local goods; this is designed to create a fair competition between goods locally made and goods made abroad. This AVT on imports is NOT a custom duty.

That will create an imbalance though - favoring imports and exports as opposed to consuming goods made locally.

	10-11-2004 03:03									#302
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quote: favoring imports and exports as opposed to consuming goods made locally

Luxury Tax!

	10-11-2004 03:05									#303
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quote: Originally posted by Japher Luxury Tax!

Is it your dream to own a yacht or something.

	10-11-2004 03:07									#304
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quote: Is it your dream to own a yacht or something

Yeah, actually..

A Catamaran in fact!

	10-11-2004 03:18									#305
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quote: Originally posted by Last Conformist Well, except that no-one here has heard of a sales tax, while everybody knowns what VAT is (well, the Swedish abbreviation is moms, but same difference). This thread has left me unclear whether there's supposed to be a differences between a VAT and a sales tax; I thought not, but some comments here made it sound it's not. Anyway, the idea behind stating the pretax price is, I believe, psychological - a lower number on the goodie gives a more positive first impression, which, so the seller hopes, will influence later conscious decisions based on the de facto (posttax) price.

In theory there is, although in practice there isn't much of a difference. A VAT is applicable at every stage of production - eg. lumber company sells wood to a furniture manufacturer, paying the VAT on their sales price. The manufacturer makes the furniture, and then sells it to a retailer, again paying the VAT on their sales price. The retailer sells it to the consumer for some markup, paying VAT again. In a straight sales tax situation, the lumber company and the furniture manufacturer would not pay any VAT - it would be entirely up to the final retailer to collect all taxes due and forward payment to the government. The big difference comes from the remittances - in a VAT situation, every step collects taxes, remits them, and gets a rebate based on what they spend in VAT. Of course, there's an even bigger difference when you get into imports and exports.

And my bad for saying a pre-VAT price was silly. Not sure what I was thinking there - it's common practice here too.

	10-11-2004 03:22									#306
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A benefit of VAT over sales tax is that the vendor does not have to concen themselves over whether the customer is or is not liable to pay VAT.

You can have the same set-up with a sales tax, where a customer can claim a rebate if they aren't liable, but then you are into a VAT situation anyway.

	10-11-2004 03:24									#307
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Let him do it.

The world needs another right wing disaster so that they can all be sent back to the hills.

Hey, if it gets bad enough, we might even see firing squads.

	10-11-2004 03:28									#308
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It seems to me that countries without VAT already have a trade advantage, because their exports to countries that have VAT are not taxed where the domestically produced goods are. If the US implements a VAT domestically produced goods will become more expensive, compared to imports, but there will be no comparative change in our export prices. That spells an increased trade deficit.

But then there is the increased savings (decreased spending). That should decrease imports. That will also strengthen the dollar (encouraging foreign investment). A stronger dollar means more expensive exports. I think we would just have to see. I don't see how anyone could make a prediciton.

	10-11-2004 03:29									#309
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quote: Originally posted by Last Conformist This thread has left me unclear whether there's supposed to be a differences between a VAT and a sales tax; I thought not, but some comments here made it sound it's not.

A sales taxe charge the product only when it is sold by a percent of the price. Are wholesellers paying the sales taxe? If they are, the final price paid by the consumer could incorporate more sales taxe than the product directly sold by the factory to the retailer. Generally, the rate is the same for all products.

The VAT follow the product all along the line, from the raw material, to the sub-contractor, to the factory, to the wholeseller and to the retailer. At each stage the taxe regarding the value added at that level is paid monthly and charged to the following level. In the end the taxe on the total value of the product is paid by the consumer.

As the value added is an accounting concept, it is very easy to control the collection of the taxe, and it give a perfect access to national macro informations.

	10-11-2004 03:37									#310
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quote: Originally posted by Kidicious That will create an imbalance though - favoring imports and exports as opposed to consuming goods made locally.

It does not favor imports which are charged by the same rates as locally made products. It favor exports only in the sense that it makes the products more attractive for foreign consumers not subjects to the same AVT system. (Most civilized countries have adopted AVT now )

	10-11-2004 03:43									#311
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quote: Originally posted by Kidicious It seems to me that countries without VAT already have a trade advantage, because their exports to countries that have VAT are not taxed where the domestically produced goods are. If the US implements a VAT domestically produced goods will become more expensive, compared to imports, but there will be no comparative change in our export prices. That spells an increased trade deficit.

This is wrong : all imports are charged with VAT whether they come from a country with VAT or from a country without.

	10-11-2004 03:43									#312
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quote: Originally posted by DAVOUT It does not favor imports which are charged by the same rates as locally made products. It favor exports only in the sense that it makes the products more attractive for foreign consumers not subjects to the same AVT system. (Most civilized countries have adopted AVT now )

ok, so there should be less imports, but the prices should not be much different compared to domestically produced goods. Exports should stay about the same. That's if the dollar maintains it's value. If the dollar becomes stronger you would think that the trade balance would become worse. But currency fluctuations have a big lag effect on trade. So in the short run the increase in foreign investment would mean a larger trade deficit, assuming of course that the economy stayed on track.

	10-11-2004 03:44									#313
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quote: Originally posted by DAVOUT This is wrong : all imports are charged with VAT whether they come from a country with VAT or from a country without.

Ok. I thought you were saying that imports were not taxed.

	10-11-2004 04:09									#314
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quote: Originally posted by chegitz guevara That'll bankrupt the country for sure. Why do Republicans hate America so much?

A flat rate of 13% has boosted Russia´s income to levels never thougt before. The main reason why they instaured the flat rate was because it was impossible to track the more complex and progressive rate. But they found the pleasant surprise that it worked, and the the tax income increased, even if the tax percentage was much lower than before.

So if Russia did it, why not the US?

	10-11-2004 04:15									#315
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quote: Originally posted by OliverFA A flat rate of 13% has boosted Russia´s income to levels never thougt before. The main reason why they instaured the flat rate was because it was impossible to track the more complex and progressive rate. But they found the pleasant surprise that it worked, and the the tax income increased, even if the tax percentage was much lower than before. So if Russia did it, why not the US?

Because as you yourself stated, Russias problem was tax COLLECTION. Hence the low receipts was based by run-away tax evasion, and putitng in a flat tax at this time helped to fight that.

The US has a very different situation.

	10-11-2004 04:24									#316
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quote: Originally posted by GePap Because as you yourself stated, Russias problem was tax COLLECTION. Hence the low receipts was based by run-away tax evasion, and putitng in a flat tax at this time helped to fight that. The US has a very different situation.

I just explained why Russia did it. No one would dare to propose this politically incorrect idea of implanting a flat tax. The only reason why Russia did was because of his limitations, not because they really believed in it. But then they found the pleasant surprise that their income was a lot more higher that it would have been with a progressive tax system if they have had the infrastructure to properly collect it. So, the Russian experience demonstrates flat tax is much better. Grants more money to both the people and the government.

	10-11-2004 04:42									#317
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I do not think that the state of state finance in the US and pre-reform Russia are unqualifiedly comparable. Quite a few arguments have already be presented as to why it would be a bad idea.

Actually, I suspect it's not really a good system in Russia today either - it's likely just that the previous system was even more dysfunctional, and that the Russian state does not have the bureaucratic capacity for administering a better system.

Anyway, is the Russian system truly flat, or is there some basic exemption?

	10-11-2004 04:47									#318
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quote: But then they found the pleasant surprise that their income was a lot more higher that it would have been with a progressive tax system if they have had the infrastructure to properly collect it. So, the Russian experience demonstrates flat tax is much better. Grants more money to both the people and the government.

The flat tax took in more money than the progressive would have if properly enforced? That can only possibly mean that the average tax rate was in fact increased, or that the economy grew very rapidly as the transition was made. In the later case it could at best be indirectly related to the tax reform.

Tax collection doesn't create value. A tax reform that, in itself, both takes in more money to the state and leaves more to the taxed is impossible.

	10-11-2004 17:52									#319
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quote: Originally posted by Kidicious My days of arguing with multitudes of idiots on end are over.

Everyone is an idiot except you eh? What are the odds of that?

	10-11-2004 20:56									#320
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quote: I just explained why Russia did it. No one would dare to propose this politically incorrect idea of implanting a flat tax. The only reason why Russia did was because of his limitations, not because they really believed in it. But then they found the pleasant surprise that their income was a lot more higher that it would have been with a progressive tax system if they have had the infrastructure to properly collect it. So, the Russian experience demonstrates flat tax is much better. Grants more money to both the people and the government.

Congratulations for failing completely to understand the corruption levels of Russia 5 years ago.

Do some research of the subject.

	11-11-2004 01:48									#321
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quote: Originally posted by Sikander Everyone is an idiot except you eh? What are the odds of that?

I didn't say everyone was an idiot, but I could find 15 or more idiots real quick if I tried.