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> Tax creates unnecessary pain There, fixed it for you.
What's the painless alternative?
I'm going to take a wild guess and say the author isn't from the US. He includes sales tax on items purchased for resale.... which is an exception in every state that I know of. Even if you purchase an item at retail with sales tax, you can file to receive the money back from the state. Additionally sales tax has nothing to do with whether your supply chain is fully integrated, and hiring all of your suppliers as emp…
There are a number of goods that do have associated sales taxes that apply on any transfer, including some of the most expensive goods Americans buy. Particularly, in many jurisdictions, there are transfer taxes on houses and cars.
2. Migrating over to VAT doesn't mean these taxes go away.
3. The only guaranteed consequence for switching to the VAT system is that taxes will become less transparent, so they will likely increase.
Earlier quoted context omitted.
I’m going to bookmark this as an example of how to clearly and specifically point out a bunch of issues with a source while maintaining a constructive tone. This type of comment makes HN the best forum for discussion on the Internet.
I agree with this. I wish there was more of it. However it seems to me like this is becoming more and more rare on HN or harder to find by being drowned out.
The number of times I’ve heard someone say “_____ is not like it used to be”, or “it’s harder to find ____ in (name community/event/location/etc)” is significant, and even when it’s true short-term, it rarely pans out long-term unless that very thought spreads to enough people that it becomes a self-fulfilling prophecy.
Like do what you want it’s your life. I’m just saying what I’ve seen.
In France when you are a company you don't pay VAT on stuff you buy from other companies, so the main point of the article doesn't work. Because I guess if we had sales tax, companies wouldn't pay it either Edit: My point is that it will not make a company economically more efficient than several companies
If it works the same as in Germany you only pay no VAT if you buy from a company in another EU country as a company. Therefore the EU has both a sales tax and a VAT depending on if you look at individual countries or the EU as a whole.
What is also great: all products targeted at consumers must contain VAT price. If it isn't mentioned, it is assumed it includes VAT. They don't get away with "oh sorry, forgot to mention VAT" at checkout.
Contrast that to every time I buy something from USA its like "oh, you gotta pay your duties" bwam extra ~20+% on price, and all prices in online discussions which are US-centric (e.g. comparisons on products such as recently Airpods Max) do not include tax (whatever you want to call it).
Different VAT throughout EU can be annoying though. Price comparisons within EU, for example. Regularly, Amazon Germany seems cheap or cheaper than Amazon Netherlands. With Prime, shipping is free either way, so sounds good, right? Until you go to checkout, they figure you really do want to ship to The Netherlands (my default and only address whilst logged in, go figure) and bwam price adjusted without being mentioned. Though that might be an Amazon specific issue.
Earlier quoted context omitted.
What's the painless alternative?
Inflation -- the government prints money, devaluing all existing money. It's a tax with no paperwork involved.
Earlier quoted context omitted.
What's the painless alternative?
Government prints as much money as it needs to pay itself. Now inflation and interest rates might be different type of pain but at least it's not the same pain of filing taxes, figuring out laws or finding someone to do that for you.
In reality, sales taxes tend to be half as large or less and are usually not actually paid on raw good for resale by resellers, so the difference isn't quite as stark, but it is odd that no mention is made of the difference in government revenue, since the government is the entity actaully imposing the taxes!
I'm going to take a wild guess and say the author isn't from the US. He includes sales tax on items purchased for resale.... which is an exception in every state that I know of. Even if you purchase an item at retail with sales tax, you can file to receive the money back from the state. Additionally sales tax has nothing to do with whether your supply chain is fully integrated, and hiring all of your suppliers as emp…
Not to mention, the example is misleading by ignoring the the government's revenue requirement. If the sales tax system worked the way he says it does, then a 20% sales tax would have to be replaced by a higher VAT tax in order for the government to get the tax revenue they "need" (desire). I don't think any government would take such a massive drop in tax revenue as is implied in the example.
Earlier quoted context omitted.
Aggregated retail is beneficial to both consumers, because they have a many competitive locations, at each of which then can buy many varieties of good. Similarly this benefits manufacturers, as they can specialise in manufacture rather than retail. Such aggregation increases the efficiency of the economy. Limiting retail would therefore decrease global efficiency, going against the principle that taxes should not in…
I wasn't specifically referring to the concept of exempting resellers from paying sales tax for items they are reselling. I was questioning the problem of manufacturers selling directly to customers. I prefer to cut out as many middlemen as possible nowadays, in order to ensure the highest probability of getting the highest quality product. I know Walmart gets lower quality products than other places and whatnot, and…
Especially with the advent of internet shopping, improved delivery speeds, and reduction in cultural inertia, going direct has become more convenient. That said, while DTC shopping may be _more_ convenient than before, it's still noticeably _less_ convenient than retail shopping. This is displayed by the overwhelming preference of consumers for such resellers as Amazon (the likes of which take an extortionate fee, and provide very little for the consumer beyond a single storefront, fast postage and financial trustworthiness).
> I know Walmart gets lower quality products than other places and whatnot, and manufacturers make subtle adjustments to products to meet resellers' desired price points.
This, and more generally the market data held by retailers, is also a benefit of retailers. By aggregating information about purchases of many different consumers over many different brands, retailers are able to drive product development towards products they know will sell even if these preferences will not be expressed directly by consumers or manufacturers.
To summarise, going back to your original point:
> What's the problem with [manufacturers selling direct to consumers]
Manufacturers know how to make things, they don't know _what_ things to make, or how to sell them to consumers. An market where only DTC sales were allowed would have products that consumers generally want less than they do now, with worse service.