Join Early Retirement Today
Thread Tools Search this Thread Display Modes
New Spanish Austerity measures. Ramping up the VAT..
Old 07-11-2012, 10:05 AM   #1
Thinks s/he gets paid by the post
Koogie's Avatar
Join Date: Nov 2007
Location: GTA
Posts: 1,438
New Spanish Austerity measures. Ramping up the VAT..

Amongst the austerity measures the Spanish announced today, ramping up their VAT (consumption tax) was the one that caught my eye.

Having ramped it up to 21% (!!!) now in Spain though, I am not sure it is going to have the intended consequences they anticipate.

I personally am a fan of consumption taxes and user fees. In fact, I would prefer to revamp the taxation system to put the emphasis on them instead of income taxes. (Of course, that is my bias being a saver and not a consumer).

Based on my experience in Canada with the GST/HST, as the percentage tax increases it drives a certain and significant ratio of things (particularily services) "underground". The higher the tax, the higher the ratio. Go to high and the portion of the economy which goes underground (and is no longer taxed at all) outweighs the gains made by increasing the tax burden on what remains.

Considering how tired most Europeans are of "austerity" I wouldn't be surprised if that happens for the Spanish.

(Never mind that they could of all used a swift, healthy kick full of austerity up the backside in the first place over the years to avoid this mess... but I digress... )
Family Motto: "Every penny's a prisoner"
Koogie is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

» Quick Links

All times are GMT -6. The time now is 05:47 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.