RE: Taxes

[Jim Gillespie <jim@xxxxxxxxxxxxx>]

Harries, Mort writes:
 > 
 > 	[Mort Harries:] Nowt.  No such thing as VAT over here.  Most
 > states and some cities do have a sales tax (e.g., here in NJ it's 6%;
 > across the river in New York City its 8.25%).  But this is a tax on
 > the final sale to the consumer; unlike VAT which I understand gets
 > imposed at each step of the process from original raw materials to
 > final sale of finished products.

    Well, sort of.  VAT is an end-user tax.  It is charged at each step, 
but claimed back by companies.

    Company A makes a widget worth GBP100 and sells it to company B for
GBP117.50.  Company A pockets the GBP100 and gives the GBP17.50 to the
tax man (or rather, HM Customs & Excise, a separate entity from the
Inland Revenue).

    Company B then marks the widget up to GBP120 and sells it to company 
C for GBP141.  Company B keeps the GBP120 and gives the VAT man GBP21,
but claims back the GBP17.50 paid to company A as VAT.

    Company C marks the widget up to GBP150 and sells it to Joe Bloggs
for GBP176.25.  Company C keeps GBP150 and gives GBP26.25 to the VAT man 
at the same time as claiming back GBP21.

    So Joe Bloggs gets stung for GBP26.25 but none of companies A, B or
C are out of pocket.

 > 	[Mort Harries:] [...] Federal taxes get reduced somewhat by
 > claiming deductions for kids [...]

    I worked in California for a few months.  When it came to filling in 
the tax forms the friendly advice from my coworkers was to claim that I
had 11 kids and thereby avoid the hassle of trying to get overpaid tax
back from the federal government.  So I claimed for 11 kids at the age
of 19, and nobody batted an eyelid :-)

                Jim
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       jim@       ,'_            I could almost visualise the 12 foot
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 '99 Sprint ST \__/ `---'  \__/                         -- Neil Ronketti


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