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U.S. E-Commerce Sites To Collect EU VAT
A concerned US-based e-commerce company with inter writes "While we have all been fighting the Internet sales tax battle here in the U.S., the European Union of 15 countries has recently required that all U.S. companies with web sales to EU citizens start collecting the value-added tax on July 1, 2003. The Washington Post has a good article about this. It seems Ebay, AOL, and others caved in on this without much complaint. Can U.S. Internet taxation be far behind if we have to start collecting and reporting 15 different VAT taxes? And sorry Mr. or Ms. EU Citizen, your website subscription now costs 15% to 25% more, starting July 1. Hope you like this added value."
Living in sweden, the only reason that I buy stuff from Amazon is that (even including costs for transports), the books are like 10-15% cheaper, and that music cd:s are like 25% cheaper. If VAT is added, this price difference will be void, and thus I will simply stop buying stuff from USA. It will simply be faster, cheaper and more convenient to buy stuff locally. My suspicion is that this is also the reason why the EU wants to add this tax: It is a way to force citizens to buy stuff from the EU instead, thus supporting the local industry.
And sorry Mr. or Ms. EU Citizen, your website subscription now costs 15% to 25% more, starting July 1. Hope you like this added value."
Assuming that governments have to collect taxes somehow, why is this a bad way to do it, as opposed to income or corporate tax?
Although many Americans give the impression that they think all taxes are evil, over here in Europe we quite like having things like free health care for everyone, tidy streets etc. We think that it makes for a fairer and more civilized society, even if it means that we are all a little poorer (in monetary terms) than you guys. Many of us find the attitude of some Americans - that taxes and social government are 'evil' - frankly a bit bizzare.
Although I guess it is understandable looking at the current state of politics in the USA. How is it that you guys no longer seem to be bothered about such essentials of democracy as transparency and avoiding rid of conflict of interest in your political leaders?
>Why would you want to give your hard earned money to a government? Because you want the government to be able to provide services to all citizens. That's what a social democracy is all about. I for one have just received my university degree and I still have money on my bank account because education is supported by the government here in Switzerland. Thank you society! Hrshgn
You only pay the VAT once. As it stands now, you pay the tax free price to the retailer, then (supposedly) pay duty & VAT during import. Of course usually you don't do that because the package is just waved through (I've NEVER had to pay duty or VAT on any imports).
What will happen next month is that the VAT will be collected by the retailer, and they will be responsible for sending it to your government. The duty will still be chargeable on import (I assume), but you won't need to pay VAT twice.
---- Den ene knappen er powerknapp, den andre er Bender voice knapp "Bite My Shiny Metal Ass"
I do not believe that Europeans generally dislike the governmental structure of the United States, but rather the policy of the government which is significantly more to the right on the political scale. The way I feel is, if we have to become a big federal country in order to stand up to the US (which I sadly feel is increasingly necessary, for many reasons), then so be it. There will be drawbacks as well but we will have to accept them as the alternative is worse. Small independant countries are shark meat in today's world.
As for socialism, well, the EU institutions as such and the treaties that founded them really are fairly liberal (in the non-American sense, where liberalism is considered freedom, etc).
I think your comparison with the USSR is quite a bit off. We're talking about old and stable democracies with market economies.
We Europeans simply don't care about the US, we don't spend out days wishing we were Americans, we don't envy the US, we are not always comparing ourselves to Americans, we don't think we have a lot to learn from America, America is on the periphery of our consciousness.
We organise things (like health care) the way we like them, and we organise things (like taxes) the way we like them.
We are big and economically powerful enough that major (and minor) American companies *have* to comply with our laws if they want to benefit from our large market.
And if Americans don't like it, don't like us, don't like the way we do things, don't like the EU, guess what? We don't care...
Assuming that governments have to collect taxes somehow, why is this a bad way to do it, as opposed to income or corporate tax?
Because in a fair tax, the rich pay either the same, or more than the poor. Income tax handles this -- either with a flat percent or with increasing brackets. The problem with sales tax is that while Mr. Millionaire might buy more things than you do, he doesn't buy *proportionally* more things -- a man can only drink so much beer, after all.
So as a total percentage of income, Mr, Millionaire pays *less* sales tax than you! Not very socially progressive, eh? Not surprisingly, the rich have always hated income tax and preferred sales tax for exactly this reason.
That's complete BS. All receipts that are to be kept in any kind of official records MUST have the VAT amount and precentage shown, so all the stores are obliged to write such a receipt if asked (due to which allmost all modern cash registers print it automatically).
I guess, it's also a question of what you are used to, but I really got irritated in most US shops due to the fact that the listed prices did not contain VAT. IMHO it's nice to know how much the thingy your are about to buy will eventually cost with out calculator..
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But where is the money really going? If we assume for a moment that you have a government who spends their collected taxes wisely (not always true, I'll admit), then that money gets put to good use.
Such taxes will be used to pay for health care (here in the UK we have a nationalised health service, paid for by taxes), transport infrastructure (roads, rail, air etc.), education (again, here in the UK, schooling is paid for by taxes, and university education is mostly paid for by taxes), police, ambulance, fire services etc. etc.
If EU citizens were shopping in the US via the web, because it is cheaper, those taxes wouldn't be being paid, and the services that rely on them would be underfunded.
I can only speak from a UK perspective on this, but while our education, health etc. services are free from many US-citizen's perspectives, they are terribly underfunded. General elections are usually fought on the basis of taxation, and the population votes for the party offering the lowest taxation (a simplification, but it's almost this simple) -- so there is little growth in the amount of money that can be spent on public services.
To put this in perspective, a few months ago I saw a news item announcing good news: NHS patients with a specific serious heart problem had their operation waiting times cut by 6 months: the waiting time for the surgery was now just 18 months. I ask those Americans reading this: would you buy health insurance that had an 18 month waiting list for major heart surgery?
If I was faced with the choice of being able to buy a DVD for £15 rather than £20, or having a health service that actually worked, guess which I'd opt for.
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