RE: Taxes

["Harries, Mort" <mort.harries@xxxxxx>]

Jim,
Hmmm,  it's worse than you think.  Using the example you give, the final
price paid by the consumer is 176.25.  Add up the amounts that go to HM
Government:  I get a total of 47.25 VAT collected along the way.  So in this
example the _real_ tax rate is 36%.  And "Joe Bloggs" the consumer is the
guy paying it. 

(176.25 - 47.25 = 129.00. ie the real price.  176.25 / 129 = 1.366 for a
real tax rate of 36.6%).  

In Denmark or Norway, with a VAT rate of 23 or 25%, the _real_ tax rate
(just for VAT, without including income taxes) must be well over 50%.  Seems
to me that this system of taxation encourages inefficiency and middlemen
too;  the Government collects more taxes the more people or companies are
involved in the production and distribution of a product, as another few
pounds (or kroner) are collected every time something changes hands.  So the
government is, I'm sure interested in keeping inefficient and convoluted
distribution systems in place, which benefit no one except the tax
collector.  

It's no wonder everything is so expensive in Europe!  Like Greg, I am
thankful that I live in the USofA, where these socialistic tendencies are
less pronounced.  Well enough of this tax stuff....it's depressing and off
topic.... we now return you to your regularly scheduled programming.......

Mort H.
Haworth NJ
'00 Sprint ST  (Ddraig goch)

> Date: Wed, 23 Feb 2000 16:37:19 +0000 (GMT)
> From: Jim Gillespie <jim@xxxxxxxxxxxxx>
> Subject: RE: Taxes
> 
> 
>     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.
> 
> 

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