Why is VAT accepted?

Well, judging by some of the things people are saying in this thread the tax money spent on education is clearly money wasted.
 
Yo dawg, I heard you like tax, so we put tax on your tax so you can pay tax whilst you pay tax. Someone needs to X to the Z this ***** up.
 
FrostedNipple said:
is there vat on ebay?
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Yes. eBay fees are VAT-able. VAT on the items being sold is the responsibility of the seller (and doesn't apply to 2nd hand items), and that's as it should be.

rypt said:
SO why are the largest 2 economies the planet able to make do with 5% then - while we are suckers with 15-17.5%?
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Because they don't have national health services, a huge free state school system, and (in comparison to the USA at least) a national transportation system that is at least usable.

The USA can't be used as a sensible tax comparison anyway - their tax system is utterly broken and as a result their debt mountain is rapidly heading off the scale. Ours is also a mess thanks to a certain person, but that's a much more recent innovation.
 
They're OK (good at the price). Far better than the average laptop speakers for example. They're light and made of plastic though so don't expect miracles in the bass department.
 
rypt said:
USA manages just fine with low (or none) sales tax rates
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Just to go back to this point... sales taxes, such as those they use in the US, are no more effective than VAT because they are open to "tax cascading".

VAT doesn't change depending upon the number of steps in the manufacturing process of an item whereas sales tax is levied on each stage, thereby meaning that consumers at the end of the chain are paying taxes on something that has already had taxes levied on it at each stage of its production.

As an example, imagine you buy a bike - it's made up of a frame, 2 wheels, a seat, pedals, handlebars, a chain, etc... For simplicity, we'll say that sales tax is 10%. Each individual component of the bike that is manufactured is taxed when bought from the supplier (or when the raw materials are purchased if they are manufactured rather than bought as an end product). The wheels cost £1 each excl sales tax, or £1.10 including tax, multiplied by 2 = £2.20. The frame costs £10 + £1 sales tax, the chain costs £0.50 + £0.05 sales tax, etc.. etc.. etc...

Overall, let's imagine the bike costs £50 excluding sales tax. Because sales tax is levied at each stage, though, the total cost is £55. However, when a consumer buys the bike at £55, sales tax is again applied making the final cost £60.50.

Now let's imagine that VAT has gone back to 17.5%. The same bike built from the same components from the same manufacturers still costs £50 excluding VAT. VAT isn't added at each stage of the manufacturing process, so the total cost remains £50. When a consumer buys the bike, VAT is applied at 17.5% which makes the final cost £58.75.

As you can see, from the perspective of a consumer, VAT is actually a fairer tax than sales tax because you're not getting taxed on something that tax has already levied against.
 
Could be worse, VAT could be 21.5% and you could have an income levy of minimum 2%, or max 6%, while still on PAYE of 20% on your first €36,000 and 41% on anything higher.
 
Berserker said:
They're OK (good at the price). Far better than the average laptop speakers for example. They're light and made of plastic though so don't expect miracles in the bass department.
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Don't worry I'm not, i was just going for the cheapest speakers that aren't completely tacky. I have the same set but with the woofer but they are 100miles away :p
 
James24 said:
For a start the populations are larger. Per Capita we are almost equal.

Also in America there is no NHS equivilant (ok, so the NHS isn't exactly brilliant in this country but at least for most things it is free. Do you fancy having to fork out for Healthcare as a necessity?
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Right then, while I do not have per capita rates, I think the following is also a good indicator - (figures are all $ calculated in the days of £1=2$)
Tax Income as % of GDP.
USA: 28.3%
Japan: 27.9%
UK: 36.6%

Now GDP:
USA: 13.84 trillion
Japan: 4.38 trillion
UK: 2.80 trillion

Tax Income
USA: 3.9 trillion
Japan: 1.2 trillion
UK: 1.025 trillion

Population (not bothering with splitting this up, just want some rough figures - yes the tax above includes companies, but as I said I just want some rough numbers)
USA: 306.22mil
Japan: 127.63mil
UK: 61.6mil

Tax $ per Capita
USA: 12000
Japan: 9400
UK: 16600

GDP Per Capita:
Japan: 37,940
USA: 47,025
UK: 45,681

I'll call that roughly even, showing that all the countries are roughly even in their Industry and so on.

NHS costs about £100bn/year to fund (so call this $200bn)
If we were to use the Japan $/person figure and add $200bn to it ...
You come out at only $754 bn for UK (some 300bn less), using the USA figure you come out about $100bn less. REMEMBER though, USA spends far more on defence, research and so on than UK (so naturally they have a higher tax rate) - and even with that, they still come out on top.

Here is where it gets interesting though, the way the Japanese health insurance works is that government pays some, and tax payer pays some as well.
It is about 8.2% of GDP, of which 83% comes from tax.

8.2% of 4.38trillion is 359.16bn, of which 83% is from tax which is about 300bn (so people contribute 61bn give or take).
Let's just add 61bn to the Japanese tax to make it 100% state funded
Using this new figure, applied to UK population, the tax per capita will be ($9.88 or $609bn in Total).

By my reckoning we are overpaying $400bn in tax in the UK compared to Japan to get a worse service.

Berserker said:
Because they don't have national health services, a huge free state school system, and (in comparison to the USA at least) a national transportation system that is at least usable.

The USA can't be used as a sensible tax comparison anyway - their tax system is utterly broken and as a result their debt mountain is rapidly heading off the scale. Ours is also a mess thanks to a certain person, but that's a much more recent innovation.
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See above.
By all accounts Japan has a world class transport and health system as well.

Edit: GarethDW and yet stuff is still cheaper in USA, go figure.
 
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meghatronic said:
lol dvdbunny.

Wait. Hold on.....

Personally, I think abandon ALL types of tax (VAT/income/council/car/green/fuel) and bring in one tax @ a fixed rate for everyone.
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Flat tax is the way forward for income tax but VAT is still required for purchasing products.

I personally think they should put a flat rate of tax at around 25% with a personal allowance of £12,000. Then get a list of every other tax, including stealth and simplify them massively. When you buy a car here's a quick breakdown on the tax you'll pay:

Income tax on the money you earnt to afford the car. VAT on the purchase of the car. Road tax to use the car. Fuel tax and VAT on the fuel to run the car.

It all seems a bit... excessive. Why not scrap road tax and just make up the extra on fuel tax? Gas-guzzlers will use more fuel anyway. That's one tax down. Then again, some people think you should scrap income tax completely and make it up on VAT.
 
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