Submitted by PauloPatricio t3_zwp5mn in worldnews
Comments
Illustrious_Emu2007 t1_j1x02tg wrote
Because VAT is the only reasonable way to tax businesses, and businesses are businesses regardless of industry and will try their hardest to get out of paying tax.
The reason for this trial is to test the theory that removing tax will lower the price of the good, not just the cost, in the hopes that the purchaser will have the right to survive.
It's not going to work, because that's not how economics works, but hey, humans need to constantly rediscover basic facts every few years I guess.
LeechBydeGrunFretter t1_j1xleoh wrote
How is vat taxing businesses? You collect VAT from the consumer and every quarter you transfer it to the government. Businesses are even VAT-excempt for most of their purchases.
frosthowler t1_j1y3qgj wrote
The idea in principle is that with or without VAT, the business would have charged about $X for their product.
Which is a very simplistic few of the whole thing. There are plenty of countries with so many import taxes, VAT, etc, that goods are very clearly overpriced and would not be so pricey without all of that, because of undercutting. The price stabilizes usually at a point that grants profit leading to a 'desirable' level of growth.
With a monopoly, or in sectors where a coordinated effort to stabilize the price at a profitable range is possible, then removing the taxes imo is useless. There is no point in removing taxes on transactions like cars, in my opinion.
But basic foods? There is no way to price fix that. The price you see is the lowest price possible at current conditions, usually. I think Spain is absolutely in the right of this line of thinking.
ForgingIron t1_j1yxkfu wrote
> >But basic foods? There is no way to price fix that
In Canada, the grocery stores conspired to price-fix bread a few years ago
frosthowler t1_j1zasp4 wrote
wtf? how? you mean supermarket chains? surely not grocery stores, especially not in all of Canada!
can I read more about this somewhere? was it something in some specific town? that sounds nuts
ForgingIron t1_j1zf5ha wrote
frosthowler t1_j1zyykh wrote
Thanks!
WaypointGL t1_j208par wrote
Not to mention that a lot of conglomerates control almost all the markets In some aspects. VAT is key at least here on Denmark to at least track sales and ensuring that companies report accurate numbers as the VAT is paid to the government. You get that back later, but it's also to ensure that everything is being done by the book and eases discovering g discrepancies in the company books.
I for one am.a huge fan as it's also helped us know what we can and can't do with taxes on our year old company!
WikiSummarizerBot t1_j1zf76g wrote
>The Competition Bureau of Canada alleged, in court documents released 31 January 2018, that seven Canadian bread companies committed indictable offences in what journalist Michael Enright later termed "the great Canadian bread price-fixing scandal" of 2018. Penalties can range from $25 million to a prison term of 14 years.
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Small_Gear_7387 t1_j1xafgo wrote
Our economic model isn't set in stone, it's set by the weight of what came before. We need some catalyst to break us out of our rut.
ldn-ldn t1_j1yzttx wrote
Businesses never pay taxes, they pass taxes to the consumers. VAT targets lower classes the most.
JimTheSaint t1_j28dzfn wrote
VAT is never targeting businesses, it is targeting consumers. I don't know how you have come to any other conclusion
mouserat_hat t1_j1xymop wrote
I love this explanation
AKravr t1_j1yk3sn wrote
But it's a bullshit answer, VAT is paid by the consumer.
TywinDeVillena t1_j1y4wiz wrote
Spoiler alert: Prices won't get lower.
Supermarkets and shops will keep the prices as they are, pocketing the difference. We have already seen something like this, when the VAT for cultural spectacles (theatre, cinema) got reduced and prices didn't move a bit.
ldn-ldn t1_j1z0ad2 wrote
They will, eventually. Similar countries with VAT on groceries have higher prices than countries without. Real life example: France and UK.
HigglyMook t1_j1yf160 wrote
This is all smoke and mirrors. They want to look like they are doing something about inflation. This isn't gonna change anything. The simple fact of the matter is they can't. Prices don't ever come down. The only way to fight inflation is to not let the prices go up in the first place.
autotldr t1_j1vzdnj wrote
This is the best tl;dr I could make, original reduced by 79%. (I'm a bot)
> The drop was recorded in the first half of December for public lighting, which represents 40 per cent of many communities' annual electricity consumption, according to Enedis, the operator of France's electricity distribution network.
> With 11 million lighting points across the country, public lighting has a power demand equal to the power from one nuclear reactor, according to Enedis.
> There have been efforts to reduce public lighting use by turning off lights earlier in the evening, a measure that has been often employed in smaller towns and cities.
Extended Summary | FAQ | Feedback | Top keywords: lights^#1 electricity^#2 public^#3 due^#4 per^#5
tomorrow509 t1_j1w871m wrote
Bad Bot. You left out the meat of the article:
Spain will scrap the value-added tax on basic food items for six months as part of a series of new measures to help people to cope with the rising cost of living.
Prime Minister Pedro Sánchez announced that the VAT would be reduced from 4 per cent to 0 per cent on basic food items, such as bread, cheese and vegetables, while it will be reduced from 10 per cent to 5 per cent on oil and pasta.
The government also approved a one-off aid of €200 for families with incomes of €27,000 or less to compensate for the increase in food prices.
The new anti-crisis aid package is worth €10 billion, bringing the government's expenditures on aid measures to €45 billion.
Since Russia launched its invasion of Ukraine in February, the Spanish government has announced multiple aid packages to help the poorest households cope with inflation, which has soared across Europe.
PencilPacket t1_j1wiau1 wrote
meanwhile in the UK.
memoriesofgreen t1_j1xshp2 wrote
There is no VAT on food in the UK.
AbzShrGay9677 t1_j1ykzyq wrote
While most food attracts a 0% VAT rate there are exceptions…
https://www.gov.uk/guidance/food-products-and-vat-notice-70114
pokpiko t1_j20fo8c wrote
I doubt it'll change much, poland put emergency 0% vat on food and fuel from the start of 2022 and even the most basic foodstuff prices got hiked by a metric fuckton so I somehow doubt Spain will avoid it.
anyfirestarter t1_j1we2n1 wrote
1
theassassintherapist t1_j1wrxrf wrote
As someone living in a country without VAT, that makes sense. I assume value added tax was on luxury goods like sports cars, so why were they taxed on everyday food on the first place?