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Old 04-09-2010, 02:46 PM   #41
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Ouch 19.6% tax on sales. I may have to buy that new car and major appliances fast if they ever announce a VAT here in the US.
That's what I was thinking. I remember when there was an excise tax on luxury goods...anyway I think I do. Was that in the 60s or 70s when that tax was lifted or am I imagining that?
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Old 04-09-2010, 02:48 PM   #42
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Originally Posted by Nodak View Post
Canada has both Provincial sales tax and VAT in at least some of the provinces. I am certain Manitoba has both and they add about 15% to the cost of goods.
Sales taxes in Canada - Wikipedia, the free encyclopedia

Visible consumption taxes include GST (goods and services tax), currently 5%, and provincial sales tax (varies from province to province, currently 7% in Manitoba). Hence, a restaurant meal, or a purchase, will have 12% added to it in Manitoba. There is no PST on food or kids' clothing. Some provinces are reducing administration by using a Harmonized Sales Tax which is the sum of the GST and PST. Alberta (the richest province) has no provincial sales tax at all.

The history of GST in Canada is interesting. It was introduced in 1991 at 7% and was wildly unpopular. Over the ensuring decade, combined with careful financial management, it contributed to large budget surpluses that put Canada in a relatively good position to weather the recent recession. The current government, in an effort to gain votes, cut the GST to 6% in 2006 and then to 5%. Economists (and I) agree this was a bad decision. We could do with that extra 2% now when we are in a deficit spending position to stimulate the economy.
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Old 04-09-2010, 02:52 PM   #43
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Ouch 19.6% tax on sales. I may have to buy that new car and major appliances fast if they ever announce a VAT here in the US.
It depends. Is there an equal reduction in other taxes so your total cost is the same (or slightly more or less)?
We are getting well ahead of things, and I would agree with you is 20% is simply added ontop of what we are already paying.
However if there is a cut in our income taxes (which I doubt) then who knows.
I guess I am saying is it is too early to make judgements.
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Old 04-09-2010, 02:54 PM   #44
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Sales taxes in Canada - Wikipedia, the free encyclopedia

Visible consumption taxes include GST (goods and services tax), currently 5%, and provincial sales tax (varies from province to province, currently 7% in Manitoba). Hence, a restaurant meal, or a purchase, will have 12% added to it in Manitoba. There is no PST on food or kids' clothing. Some provinces are reducing administration by using a Harmonized Sales Tax which is the sum of the GST and PST. Alberta (the richest province) has no provincial sales tax at all.

The history of GST in Canada is interesting. It was introduced in 1991 at 7% and was wildly unpopular. Over the ensuring decade, combined with careful financial management, it contributed to large budget surpluses that put Canada in a relatively good position to weather the recent recession. The current government, in an effort to gain votes, cut the GST to 6% in 2006 and then to 5%. Economists (and I) agree this was a bad decision. We could do with that extra 2% now when we are in a deficit spending position to stimulate the economy.
Thanks for the correction.
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Old 04-09-2010, 03:30 PM   #45
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Having a national VAT in the 12-20% doesn't seem too much more extreme than the 8-9% sales tax many of us pay in the US at the state and local level already. I'd just hate to see the VAT get added on top of the already high state/local sales taxes.

From our recent trip to Argentina and Uruguay, the VAT is actually easier to deal with on the consumer end versus our sales tax in the US. A $1 (or $1 peso) item actually costs $1, and not $1.08 after tax. No requirement to be able to figure out that if I don't want to spend more than $100 for something, I need to buy roughly a $92.50 item and then pay, say, 8% tax on it.

And all the VAT receipts I saw had the VAT specified in an exact amount, and a percentage (21% in Uruguay IIRC). So, for example, the receipt would say $100 pesos for the item, then $21 pesos for VAT. But the item you had picked up would be labeled $121 pesos on its price tag. I even recall in Uruguay that they had signs everywhere asking you to make sure your receipt specifies the VAT they are charging, and if not report them, since "it is all our duty to pay VAT".
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Old 04-09-2010, 03:46 PM   #46
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Actually, in a pure VAT, you don't see it. A little is added at every stage of the process, from the manufacturer to the wholesaler to the retailer. The end consumer will not generally see all those taxes listed. They *might* see the tax added in the final stage of distribution (from the retailer to the consumer), but not the taxes built into the price before then.

In a national sales tax, on the other hand, you would see the tax specifically listed as a line item. Which is one reason I would prefer that to a VAT if we had to have one or the other. A VAT makes it easier to "hide" the taxes, much as with the gas tax where the price at the pump includes the tax which isn't separately listed.
Actually, in the US, the tax is added at the checkout register, so the price you see when you are shopping does *not* include the tax - here in Europe the tax is included in the price - you don't see the tax until you get the receipt where it is listed as a line item after the fact. Different process. And can affect behavior differently - I know I have to remember to ask what the sales tax is and then calculate what something will really cost me - with the VAT included, the price is much higher so is a dis-incentive to purchase...unless there is a need. Also, as for the tax being 'reimbursed' along the production line.....19% tax is a he!! of a lot to pay at the register for something - as I said before, I believe the costs are passed along the chain to the final owner....the purchaser.

As for the inevitability of a VAT - wow - I sure hope that's not true. Why can't we cut spending? Frankly, it's as my father used to say, "It depends on whose ox is being gored." Someone is going to get $crewed - I vote for incentivizing personal responsibility and not dependency. It will be better in the long run---
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Old 04-09-2010, 04:06 PM   #47
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As for the inevitability of a VAT - wow - I sure hope that's not true. Why can't we cut spending? Frankly, it's as my father used to say, "It depends on whose ox is being gored." Someone is going to get $crewed - I vote for incentivizing personal responsibility and not dependency. It will be better in the long run---
I would vote for that too. But when were we given that choice? Americans will never change their behavior or expectations as long as they are told "There will be no middle class tax increase to pay for all these goodies, only more tax on those evil rich guys " Right- many of these evil rich guys would be hard pressed to achieve a nice family lifestyle in any one of several large US cities.

America will change and people get reasonable when the dollar crashes and loses it's stature as reserve currency, and the IMF comes along to tell us what to do.

Can't expect mature behavior from people who don't have a clue what mature means.

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Old 04-09-2010, 04:12 PM   #48
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BTW, by law in England a price is advertised with VAT included. You will only see the breakout at receipt time. Seems a double-edged method in that the government does not lobby the tax directly on the consumer but on the producer. But the producer is left to collect the VAT. Government = good guy, producer/retailer = bad guy.

The only places that were able to say L 130 + VAT, were shops that could reasonably say that their products were available to export markets. Tourist shops and many crystal, jewelery, etc. shops would display as "Price + VAT".
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Old 04-09-2010, 05:11 PM   #49
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BTW, by law in England a price is advertised with VAT included. You will only see the breakout at receipt time. Seems a double-edged method in that the government does not lobby the tax directly on the consumer but on the producer. But the producer is left to collect the VAT. Government = good guy, producer/retailer = bad guy.

The only places that were able to say L 130 + VAT, were shops that could reasonably say that their products were available to export markets. Tourist shops and many crystal, jewelery, etc. shops would display as "Price + VAT".

Does anybody know when they started to put the VAT on the receipt

I lived in London in late '99 to early '01. I bought a lot of stuff and not one receipt had a VAT on it... I went to other countries and they did not include VAT. The only time I knew what the VAT was was when I was in Switzerland and bought a watch. They asked if I was going to apply to get my VAT back. I said 'yes', not knowing what I needed to do. The receipt had the VAT. Maybe the EU made a change and forced them to put the VAT on the receipt.

PS... I did NOT get my VAT back as you had to spend more money than I did... so screwed on that one....
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Old 04-09-2010, 05:44 PM   #50
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I think it's inevitable that we have to raise taxes (AND cut spending), but I prefer my taxes to be obvious and transparent, not hidden in the price tag. People should know how much government is costing them.
We already know this - "an arm and a leg!"
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Old 04-09-2010, 06:11 PM   #51
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Texas Proud,
here is a receipt from 1995. So it looks like it's been there for a while.
http://openlearn.open.ac.uk/file.php...AL_receipt.jpg

EDIT: It seemed to me that many shops did not have a register that broke it out. I know most chemists shops like Boots did but the small corner ones did not.
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Old 04-10-2010, 03:58 AM   #52
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The surplus SS and Medicare payments were spent by the govt and they issued special bonds as IOUs. Guess who pays off the Bonds? Tax Payers. Guess how they are going to raise the revenue to pay-off the IOUs? VAT or Some other Consumption Tax.

Why Consumption tax? But will it be for goods, services or both? What will be exempt (if anything)? A consumption tax is progressive... people who have more tend to spend more (across all demographics and classes). Additional income tax is not popular. Additional cap gains taxes would probably cause people to take less risk with capital.

So the choices are cut spending, raise taxes, or both. The new big expenses coming at the US Govt (baby boomer SS and Medicare).

However, a consumption tax is tricky... it could drive grey/black markets, people going out of the country, etc. Plus collection can be a big cost.

I believe the tax will be on certain forms of energy consumption. For the most part, the method of collection is easier, that cost gets passed along to consumers directly or indirectly. Energy is embedded in every product or service. To offset product imports, the govt will probably assign some sort of tax on imports to not give foreign manufacturers an advantage or to make exports energy tax free (or possibly a combination of both).

The govt might do this with a Fossil Fuel Tax/Carbon Tax and assign a value to all imports or exports. This might actually be better for America considering that Asia countries are doing an arbitrage on dirty energy as part of their lower manufacturing cost ans selling to the US (who is the worlds largest consumer).


Bottom Line: We are going to pay more taxes... hopefully those taxes are crafted to help America achieve certain her goals (energy independence, jobs in America) and not another advantage to China and India!
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Old 04-10-2010, 06:31 AM   #53
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Originally Posted by happy2bretired View Post
That's what I was thinking. I remember when there was an excise tax on luxury goods...anyway I think I do. Was that in the 60s or 70s when that tax was lifted or am I imagining that?
You remember correctly, it was a holdover from WWII and expired in the 60s. As for the current situation, when November rolls around my policy will be "vote the bums out, all of them."
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Old 04-11-2010, 12:26 AM   #54
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Texas Proud,
here is a receipt from 1995. So it looks like it's been there for a while.
http://openlearn.open.ac.uk/file.php...AL_receipt.jpg

EDIT: It seemed to me that many shops did not have a register that broke it out. I know most chemists shops like Boots did but the small corner ones did not.
OKKKKK.... I wish I had some from where I was over there.... I do NOT remember seeing anything on the bottom of my receipts... but then again.. it really did not matter as I had to pay it...
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Old 04-11-2010, 12:33 AM   #55
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Decided to look this up....

Here is from the UK Vat program:


When you sell goods or services that incorporate a VAT charge you must supply your customer with a VAT invoice. Generally the VAT invoice should include the VAT amount paid, your companies VAT registration number, a unique invoice number and the date the invoice was raised.
You must retain all VAT records including invoices and receipts for a 6 year period. These may be required by law. Remember that a VAT receipt for a purchase you have made through your business is a right to claim back the VAT paid, without this you legally have no right to claim back the VAT.
You must notify HM Revenue and Customs within 30 days if any of the details for your company change.
You must charge VAT on supplies made to the company's employees or inter-company transactions.
You should not claim back VAT on personal expenses.




SOOOO, I guess they DID provide the VAT on the receipts... seems that you NEED this info just in case you are adding value and selling it to someone else... so you can get your 'refund' of the VAT you paid....
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Old 04-11-2010, 08:07 AM   #56
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It`s amazing how the government can`t get anything right.Just by accident right?

It looks like they`ve looted social security.Get ready for that to be slashed.
These criminals will be stealing our pensions,401ks and IRAs before it`s over.
Of course let`s not forget to tax us to death first.

Stop believing these con men.They want to take us to third world status.
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Old 04-11-2010, 08:11 AM   #57
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A consumption tax is progressive... people who have more tend to spend more (across all demographics and classes).
I think you'll find yourself in the minority in your opinion on this one. Unless all kinds of goods are exempted (leading to all kinds of trickery and enforcement issues), a consumption tax is regressive. People with lower incomes spend a higher proportion of what they earn.
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Old 04-11-2010, 08:38 AM   #58
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I think you'll find yourself in the minority in your opinion on this one. Unless all kinds of goods are exempted (leading to all kinds of trickery and enforcement issues), a consumption tax is regressive. People with lower incomes spend a higher proportion of what they earn.
All taxes that manufactures/service providers/etc collect are summarily regressive. But, advocates for the poor don't raise that as an issue.
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Old 04-11-2010, 09:26 AM   #59
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This discussion is fun but just like the federal take over of health care we have zero input on this. The people who are in power have no choice but to keep stealing from us and giving to the "less fortunate" who will continue to vote to keep them in power.

The big concern is that any one who has enough assets to even contemplate early retirement is wealthy by the standards of the average voter who is working as hard as they can just to make it paycheck to paycheck or are working as hard as they can to keep their government issued entitlement check coming in. We are squarely in the cross hairs.

Hang on and Hope, that's all we can do now.
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Old 04-11-2010, 09:59 AM   #60
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This discussion is fun but just like the federal take over of health care we have zero input on this. The people who are in power have no choice but to keep stealing from us and giving to the "less fortunate" who will continue to vote to keep them in power.
Don't forget the kleptocrats' other constituency- Wall Street. Pols hand out cash to the "poor" to get votes, and hand out friendly laws and dispensations to the Wall Streeters to keep that cash source flowing back to the pols. And of course since many of the Washington elite will be heading to Wall Street when they get tired of Washington's muggy summers they want to stay on very friendly terms with the masters of the universe.

The US is only a few short steps above the African kleptocracies- mostly only a matter of style.

Ha
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