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?
🤔
Because fuck the poor and working class. Don’t forget that they’re double dipping since income is often taken out of your earnings before you even get your money then every single purchase is taxed too.
No, not every purchase is taxed, and not every purchase that is is taxed at the same rate.
These rates are set by individual countries (because “Europe”, lol) and can change year to year. For example Ireland doesn’t tax books, basic food staples, children’s clothes, medicines. Heating fuel is taxed but was set to a reduced rate during the cost of living crisis. Other countries will have different priorities.
VAT ensures that even those who have a large amount of wealth accumulated without “income” also contribute to society.
😭
I thought EU was very progressive since they often have stuff (like healthcare) much better than the US. Is their “progressiveism” a myth? Am I over-estimating how progressive they are? 🤔
The EU is one of the most progressive regions on Earth, if not the most. That said they’re definitely nowhere close to perfect, as seen from the encrypted messaging fiasco.
There’s another factor that nobody mentioned: the sales tax in EU countries is different for different products. This allows countries to incentive or disincentivize different classes of products by ramping the sales tax up or down. Higher tax on junk food, cigarettes and/or alcohol, low or nonexistent sales tax for basic ingredients and medicine.
Interestingly, France and the Czech republic tax wine and beer respectively like basic food.
How the fuck you think they pay for healthcare and social programs?
Taxing at point of sale is a weird way to do it.
A better way (in my opinion) is by income, the higher, the higher your tax rate.
A VAT is essentially like a “flat tax” rate, that some politicians in the US are proposing.
We do that too.
Not sure about countries in the EU, but in the UK your income is taxed at different rates depending on how much you earn in a year.
Depends how you look at it. Out of my wage, I lose ~50% after taxes and the healthcare system’s “fair share” and, depending on the country, the health system is so under-funded anyway that there’s a heavy incentive to give in and pay private if you want certain operations or some such done anytime in the foreseeable future.
China also uses a VAT and they’re way more progressive than the EU. As far as I know it’s generally worse in both fairness (can’t be used to decrease inequality) and impact to productivity to income tax, but it’s much easier to administer.
In what way does VAT hurt the poor more than the rich? Considering it’s on each item you buy it clearly impacts the rich more than the poor.
Because VAT is proportional to the item, not the person’s income. From one perspective, yes it’s a fair system but from another, the cost of living is significantly greater for a poor person than a wealthy person. Many are barely scraping by while others are out wining and dining and still getting plenty for free.
I don’t understand what you mean “still getting plenty for free”.
I agree that there shouldn’t be this kind of wealth inequality, and it’s madness that people are starving in countries that are so prosperous, but it’s a little disingenuous to ignore the fact that wealthier people pay more in tax. They’re not getting stuff for free, they’re getting stuff for more than it costs poorer people.
Exactly. I get free healthcare like someone who’s being paid minimum wage (or an unemployed person who has registered as unemployed), but I also pay a significant amount in taxes and for most of my career, that has been money that comes from outside my own country and mostly outside the EU, as I’ve worked for software companies selling their products/services to foreign markets.
Plenty of reason to hate me, but getting free stuff from the gvt isn’t one of them, I pay way more for it.
The thing that comes to mind is Amazon being given bramd new warehouses by governments in exchange for barely-humane working conditions. This means, the working stiff has payed for their ability to get a job. Company expansion should come out of that same company’s profit margin, not the back pocket of the working force.