Isn't EU's "VAT" a regressive tax? Why do they have that, instead of something like, taxing the rich?
Many EU countries have a "VAT" and like feel like this is kinda targeting poor people. Like, for the rich, this is insignificant, for poorer people, a (example) 20% tax would be a huge burden. Why do they do this?
It is, but it's also a very efficient and difficult to evade tax.
For many EU countries the VAT revenue is equal or larger than the income tax revenue.
Most Europeans don't mind it. You can control your spending, so VAT doesn't hit us in inconvenient ways, like for example, taxes on cars and property.
European countries compensate poor people with good social programs. So in the end, poor people are getting more benefits than the VAT they pay.
They also tax the rich through progressive income taxes, capital gains taxes, corporate taxes etc.
If you're asking why not just tax the rich in place of a VAT, well, it's sort of why not tax the rich to pay for absolutely everything we could want. The costs and difficulties in taxing the rich generally scale to the point where the marginal revenue raised by the tax becomes negative.
Sales taxes, including VAT, are inherently regressive. Normally things like unprocessed food are exempted to minimize impact, but it does still affect the poor more than the rich. Why keep them? They are easy to collect, hard to avoid and can bring in lots of revenue without people noticing or complaining.
Essential goods have a 6% taxation in my country (Portugal). This also applies to the first 200kw/h you use in your home.
Then there is a 13% for services, like restaurants. I think wine is also taxed thia way.
The higher tier is reserved for non essential items, like cookies, chocolate, fuels (which are technically being double taxed), cars, etc.
We also pay a direct contribution for our social security system (11% over your gross salary, monthly), plus a direct taxation over our overall monthly salary (the minimum wage workers are exempt from this).
The discussiom on these taxes is long, old and boring but it essentially boils down to having those who want something, pay for it.
It's a vat. Like a vat of oil. They deep fry the money, and then recirculate the crispy delicious money into the ecconomy. That's what thfy mean by eat the rich. Deep fry their money, and eat their faces.
.......what? Whys everyone looking at me like that?
Just to make sure you know: Basically everyone has a VAT, except the US. It's not some special EU thing.
We have it in Switzerland, Canada has it, Japan has it, China has it, India has it, Russia has it, Brazil has it, Indonesia has it, Australia has it, Ukraine has it, Mexico has it, South Africa has it... I'm stopping here, but every country I googled had it so far.
Here in the Uk we have tax for services (council tax), tax for health care (national insurance), tax for all your income (income tax) and almost everything you buy includes a small tax called VAT (value added tax) which is about 20%. Thereās also a few taxes on cigs, alcohol and petrol.
VAT not on food, books but it on basically everything else. The more things you buy, the more tax youāve paid. You more yoy spend on items the more you pay.
I donāt know why people are calling it a tax on the poor. Itās obviously a tax on the biggest consumers.
It's just a different implementation of sales tax. Non-European countries in the Global North also have it, including the big one I shall not name, just sometimes under a different form and thus different name.
Because fuck the poor and working class. Don't forget that they're double dipping since income is often taken out of your earnings before you even get your money then every single purchase is taxed too.
The rich don't have to pay taxes. The taxes they pay are largely voluntary.
That is the way of the world. It's a truism. That's what happens. You cannot change it.
Bonus extra: the trickle-down theory almost entirely doesn't exist either. BUT the second generation - the grandchildren - after the original rich person will usually piss almost all of the fortune away.
Second bonus extra: the same thing happened with serious socialism; the leaders become dictators.