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frosthowler t1_j1y3qgj wrote

Reply to comment by LeechBydeGrunFretter in Spain scraps VAT on basic food to help with rising cost of living by PauloPatricio

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.

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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

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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

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ForgingIron t1_j1zf5ha wrote

https://en.wikipedia.org/wiki/Bread_price-fixing_in_Canada

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frosthowler t1_j1zyykh wrote

Thanks!

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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!

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WikiSummarizerBot t1_j1zf76g wrote

Bread price-fixing in Canada

>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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