Quote:
Originally Posted by Mazomaniac
One reason is that the VAT (at least as it works in Europe) shifts the burden of tax accounting and payment from the single company that sells the product to the end user to all the companies involved in the supply chain. This grossly increases the amount of tax accounting done by manufacturers and other biz-to-biz sellers and in many cases requires that these businesses pay VAT due to the government before they actually receive payment from their customers. Under our current system manufacturers and wholesalers are generally immune to any sort of sales tax payment or accounting. Under a VAT they would have just as much or even more burden for accounting and paying the tax as a retailer does under our current system.
I do business both here in the US and in Europe and have to live with both systems. The EU VAT system is a complete pain-in-the-ass when it comes to paperwork and pre-payment of VAT on certain transactions. However, it's nearly impossible to cheat in a VAT system. LOTS of companies and individuals in the US cheat on their sales and use tax payments. It's very easy to do and is becoming more and more of an issue with the increasing inter-state sales done over the internet. One advantage/disadvantage of the VAT (depending on which side of the transaction you're on) is that you can't avoid the tax just by buying something mail order. My personal opinion is that VAT is the fairer system even given the burden it places on businesses up the supply chain.
|
Mazo, merci beaucoup! that's a fantastic comment. took me quite a while to parse it and fully understand it, because i'm internally mostly euro-trash, while your POV it that of an American. but once i "got it" i realized we have almost the same perspective.
And true, esp. since most EU memberstates implemented a reverse-charge VAT (or as the french call it
l'autoliquidation de la TVA) tax cheating is quite hard to do these days.
