A
Annaax
Guest
I have my gcse economics on wednesday and worried this question will come up! Good and bad points about v.a.t?
thanks!
thanks!
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Macrocompassion
New member
The only good tax is on land values. All other forms of taxation including VAT are bad in that they discourage the amount of productivity. Land-value taxation encourages it because it provides for greater opportunities to work and (after the land prices have dropped ) for the prices of the goods to become less too.
V.A.T can be regarded as a distortion for the market. The goods cannot be sold at the marginal cost price, which means that the equilibrium quantity is lower and the price is obviously higher compared to a fully competitive equilibrium.
However V.A.T has also a lot of positive externalizes for the society...
However V.A.T has also a lot of positive externalizes for the society...
Depends on what your objective is. Any tax discourages that activity relative to others. An income tax discourages producing income and savings in favor of consumption. A VAT works the opposite way.
In reality, what politicians want is to be able to tax anything anywhere at any time, so people rightly resist new forms of taxation because -- no matter what was said at the time -- they simply result in higher levels of taxation. Do you recall what was said in support of passing the 16th amendment?
In reality, what politicians want is to be able to tax anything anywhere at any time, so people rightly resist new forms of taxation because -- no matter what was said at the time -- they simply result in higher levels of taxation. Do you recall what was said in support of passing the 16th amendment?
Macrocompassion
New member
The only good tax is on land values. All other forms of taxation including VAT are bad in that they discourage the amount of productivity. Land-value taxation encourages it because it provides for greater opportunities to work and (after the land prices have dropped ) for the prices of the goods to become less too.
Depends on what your objective is. Any tax discourages that activity relative to others. An income tax discourages producing income and savings in favor of consumption. A VAT works the opposite way.
In reality, what politicians want is to be able to tax anything anywhere at any time, so people rightly resist new forms of taxation because -- no matter what was said at the time -- they simply result in higher levels of taxation. Do you recall what was said in support of passing the 16th amendment?
In reality, what politicians want is to be able to tax anything anywhere at any time, so people rightly resist new forms of taxation because -- no matter what was said at the time -- they simply result in higher levels of taxation. Do you recall what was said in support of passing the 16th amendment?
VAT increases the value of goods and services to consumers and producers.
Cost of production for consumers also increases.
However
Indirectly, the society at large benefits since revenue from VAT and other sources of government revenue are used to provide essential services to the people. VAT is recommended as a good source of revenue for the government to meet its expenditures, also it has several advantages over other forms of taxes
Cost of production for consumers also increases.
However
Indirectly, the society at large benefits since revenue from VAT and other sources of government revenue are used to provide essential services to the people. VAT is recommended as a good source of revenue for the government to meet its expenditures, also it has several advantages over other forms of taxes
Depends on what your objective is. Any tax discourages that activity relative to others. An income tax discourages producing income and savings in favor of consumption. A VAT works the opposite way.
In reality, what politicians want is to be able to tax anything anywhere at any time, so people rightly resist new forms of taxation because -- no matter what was said at the time -- they simply result in higher levels of taxation. Do you recall what was said in support of passing the 16th amendment?
In reality, what politicians want is to be able to tax anything anywhere at any time, so people rightly resist new forms of taxation because -- no matter what was said at the time -- they simply result in higher levels of taxation. Do you recall what was said in support of passing the 16th amendment?