Mainstream Economics Thread

[Justwin]

I have consistently used "and" . . . Tarriffs AND VATS

I am also very welcome to this fact: The United States does not have a national Value Added Tax (VAT) system; instead, it relies on state-level sales and use taxes, which are administered independently by each state

In the vast majority of instances, states and local governments are far more nimble in adjusting sales and use taxes then any central government and far more nimble in exempting goods from sales taxes entirely and/or exempted goods from sales taxes at certain points in the supply chain process.

In the US we have multiple states that have no sales tax at all . . . in other states there is a strong movement towards removing or greatly reducing sales taxes on consumables with a very high level of imported products in the chain.

How do VATs disadvantage US firms and/or increase the trade deficit?

Why do you keep leaving out "and tariffs"?

The combination is important.

You have tariffs and then embedded VATS at every point in the chain. That's the disadvantage.

Again, it's immaterial if domestically produced items have the VATS, because they are not facing the "in addition to" tariff component.

You are apparently going to completely ignore the national vs state/local component.

There are also a whole other series of factors that could impact trade deficits.  I don't think I am going too far out on a limb here by saying that the US is a relatively easy place to do business in, as compared to many of our "trade partner" countries.

From my perspective, I can see how tariffs disadvantage US firms. I cannot see how VATs alone or in combination with tariffs disadvantage US firms. Please explain to me how VATs alone or in combination with tariffs disadvantages US firms. Also, how do VATs alone or in combination with tariffs impact the trade deficit?

What is the relevance of the national vs local/state component?

Am I being punked . . . is this the Matrix?


What is confusing you here. National VATS cover the entire supply chain and are automatic are they not?

My company just ordered thousands of dollars in equipment. By virtue of where the seller exists in the supply chain, where we sit in the supply chain and the type of end user and the state they reside in, there's no sales tax at any point in the transaction.  In a national VAT environment, the same scenario is highly unlikely be it known or hidden.

Thus the "AND".  Tarriffs and VATS.

Once again, I don't think I am going too far out on a limb here by saying that US state and local government are more nimble than Euro or Asian G20 central governments, with likely noted exceptions of course.

If a country imposes a VAT on their own domestic goods and imposes the same VAT on imports I don't see how that disadvantages foreign firms.

Tariffs and VATS rolled into the pricing model of imported products seems to be a concept completely lost on you.


JW - What is the simple thing that this administration keeps saying will lower tariffs?

Again - I remain fascinated by #blueanongE who continually proclaim themselves as free market zealots, yet they clearly don't have a single problem with alleged treading partners not adhering to free market principles and thus #blueanongE weirdly thinks the the US should just sit and take it.

I am also still waiting for someone to explain to me how a $1.3 trillion dollar (all time record) trade deficit is good for the United States.  Oh, and don't be a total derp (which is hard for you guys I know) and say I am demanding there be no trade deficits.  But to look at the 2024 numbers and see (one example) the YoY $ increase in imports outpace the $ increase in exports by 2:1, even when building in inflation (which was and still is a thing, despite the protestations of #blueanongE) is concerning.

VATs are rolled into the pricing of domestic products as well, so there is no disadvantage to foreign firms.

I don't know what this administration keeps saying is the simple thing that will lower tariffs. Enlighten me.

I don't think I ever said that big of a trade deficit is a good thing. I said if we want to reduce the trade deficit, we should focus on reducing our budget deficit and the best place to start on that is the defense budget.

Please point me to the United States Government's VAT table for domestically produced goods.

Our alleged trading partners - automatic embedded VAT's across all segments of the supply chain and tariffs, in many cases very high tariffs.  Sales taxes are an end point tax, multiple transactions within the chain are very very often exempt from sales taxation.  Some states have no sales tax, other states often reduce or eliminate sales taxes on certain products (and obviously increase them on other goods and services).  I just gave you an anecdotal example of 3 steps within a particular chain, in this case distributor-reseller-end user, where no party will pay sales taxes out of that trifecta.  The end user, like hundreds of thousands of end users - including the government is sales tax exempt.

The administration says if other countries lower their tariffs the US will do the same.

#blueanon clearly has no appetite for any reduction in Federal spending . . . they've made that abundantly clear.

Well I guess you have your thoughts on VATs and I have mine.

[sonofdaxjones]

In 2024 the avg sales tax rate in these United States was 7.5% (coupled with lower tariffs then most trading partner countries). 

For EU countries - the average VAT is 21.8%. Even non EU Western Euro countries come in at a full % percentage above the average US sales tax. There's selected goods and services that have lower rates (sounds familiar). In the majority of cases, the reductions are in line with or exceed the avg US sales tax and in many situations like food, they are still substantially higher than the states and localities in the US that have reduced or eliminated taxes on food.

[DaBigTrain]

It's good to see that dax is totally not melting down about all of this stuff

[kim carnes]

Seems like you've got a good plan president crap for brains

https://x.com/boes_/status/1907824185633812911

It’s not inflation when the money goes to the govt, it’s taxes.

[Rage Against the McKee]

Wouldn't a vat (as described by dax) make a country's exports less competitive? A tariff on their own goods so to speak.

don't forget about those rough ridin' penguins!!!!!!!!!!!!

Polar bears. Bear market. Coincidence?

[Justwin]

In 2024 the avg sales tax rate in these United States was 7.5% (coupled with lower tariffs then most trading partner countries). 

For EU countries - the average VAT is 21.8%. Even non EU Western Euro countries come in at a full % percentage above the average US sales tax. There's selected goods and services that have lower rates (sounds familiar). In the majority of cases, the reductions are in line with or exceed the avg US sales tax and in many situations like food, they are still substantially higher than the states and localities in the US that have reduced or eliminated taxes on food.

VATs, as well as sales taxes, are applied equally to imports and domestically-produced goods. That does not disadvantage US firms compared to domestic firms in other countries.

[sonofdaxjones]

It's good to see that dax is totally not melting down about all of this stuff

The guy who ran away like an infant, then came back and says he just wants to talk about things . . . is always mad that people are just talking about things.

It's wholly driven because his feeble little mind can't handle anything less than group think.

It's very sad

[sonofdaxjones]

In 2024 the avg sales tax rate in these United States was 7.5% (coupled with lower tariffs then most trading partner countries). 

For EU countries - the average VAT is 21.8%. Even non EU Western Euro countries come in at a full % percentage above the average US sales tax. There's selected goods and services that have lower rates (sounds familiar). In the majority of cases, the reductions are in line with or exceed the avg US sales tax and in many situations like food, they are still substantially higher than the states and localities in the US that have reduced or eliminated taxes on food.

VATs, as well as sales taxes, are applied equally to imports and domestically-produced goods. That does not disadvantage US firms compared to domestic firms in other countries.

So the US goods entering other countries are not required to pay tariffs (either seller or buyer)?

Interesting, can you please point to me which countries do not charge tariffs on US goods.

I also appreciate how you completely avoided both the massive difference in EU VAT rates as compared to average US sales tax rates, and also avoided the concept of VATS being automatically applied at  every segment of the supply chain.

[BIG APPLE CAT]

Like clockwork, dax is out here fighting tooth and nail over how to arrange the deck chairs on the Titanic

[sonofdaxjones]

Like clockwork a self proclaimed champion of the free market is back here to fight for the right of our trading partners to eschew free market principles at every turn.

Lick a free market zealot . . . but only if it involves Don Trump 

Lick, why have the majority of our trading partners been so protectionist historically? Any thoughts?

Doesn't seem very partnershippie to me . . . 

[LickNeckey]

keep my name out ya mouth

[sonofdaxjones]

A perpetual flurry of tapouts

[Spracne]

We may be losing a lot of our world dominating soft power amassed over the last century, but in return we get to puff our chests and act like bullies.

We've invaded many countries, overthrown governments and sanctioned/embargoed nations across the globe.

We've killed collectively millions in the process and displaced millions more in that same process.

Yet now you're worried about appearing like a bully?   

Once again with this unAmerican garbage. Hey, why don't you get the eff out of this country, you old $!#*? I heard Putin has an open invitation for American expats.

[sonofdaxjones]

We may be losing a lot of our world dominating soft power amassed over the last century, but in return we get to puff our chests and act like bullies.

We've invaded many countries, overthrown governments and sanctioned/embargoed nations across the globe.

We've killed collectively millions in the process and displaced millions more in that same process.

Yet now you're worried about appearing like a bully?   

Once again with this unAmerican garbage. Hey, why don't you get the eff out of this country, you old $!#*? I heard Putin has an open invitation for American expats.

Look at this turd.

Imagine being so low esteem that you can't admit to what the history books have already recorded.

[Stevesie60]

I mean, when Ben Shapiro comes out against Trump's tariffs.....

[sonofdaxjones]

#blueanongE - now shoulder to shoulder with . . . Ben Shapiro

[catastrophe]

I’m no economic expert, but I assume that the heads of most major US based businesses are, so how horned up are they over the tariffs, Dax?

[Dugout DickStone]

I mean, when Ben Shapiro comes out against Trump's tariffs.....

my how the disgusting pervy weirdos have fallen

[michigancat]

It's amazing how much dax loves these tariffs

[Institutional Control]

Which sector, after farmers, will be the first to get subsidies to keep them quiet. Probably automotive starting with Tesla.


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[CHONGS]

It's amazing how much dax loves these tariffs

Well he loves Trump.  If Trump, for some reason, came out tomorrow and said tariffs are stupid, then dax would post fifteen posts a day here about how dumb they are.

[wetwillie]

Congress can stop this at any time, so they are complicit.

[sonofdaxjones]

I don’t love the tariffs, I love laughing at the self professed resident titans of the free market - battling hard on behalf of foreign tariffs and VATS 3x our average sales tax (in the case of the EU). 

In other news the Yield curve is down .62% saving truck loads of money on our debt payments.


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[sonofdaxjones]

It's amazing how much dax loves these tariffs

Well he loves Trump.  If Trump, for some reason, came out tomorrow and said tariffs are stupid, then dax would post fifteen posts a day here about how dumb they are.

This is hilarious as I’ve observed the historic maneuvering of #blueanon relative to Trump. We could start with - “I ain’t taken that Trump vaccine”

There’s a library of Congress amount of memes if you’re interested Chong’s (the drive by experience)


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[sonofdaxjones]

I’m no economic expert, but I assume that the heads of most major US based businesses are, so how horned up are they over the tariffs, Dax?

Why are you so incapable of using the Internet?


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