Even if the VAT tax ends up being the same for imported goods versus domestically produced goods, that is still a discriminatory tax against the import. The reason is because the imported good already paid taxes in the country it was produced in.
It makes sense for a German car manufacturer to pay taxes to Germany, since the German state provides it with services (roads, police, infrastructure.) It makes no sense for an American car manufacturer to pay taxes to Germany since it gets no services from Germany. (And no, earning the "privilege" of unloading the car from the boat isn't worth 20%.)
If the EU has an interest in making this fair, they can remit the sales tax they collected to the US government. Or they can just accept that this is a discriminatory tax and may incite another discriminatory tax on the US side.
Literally every single developed country aside from the US uses a VAT.
Is the US going to crusade to change every single country to use your shitty taxation system instead of a VAT?
(the answer is no, VAT is just the only excuse they could find for tariffs on the EU, like how "fentanyl" was the only excuse they could find on Canada no matter how BS it was)
This is not how a VAT works. An American car manufacturer _selling_ a car to Germany means that the importer on the German side pays the tax, not the American. VAT is always applied to the buyer, not the seller.
Whether the buyer or the seller pays the VAT is not relevant. If the price to the consumer is higher, the economic effect is the same.
As another commenter said, this is the same as tariffs. If someone said that tariffs disadvantage foreign producers, you wouldn't smirk and say "idiot! tariffs are paid by the buyer, not the seller!" Instead of trying to demonstrate how very smart you are, you should engage with the arguments that I'm presenting.
Tariff is applied to import and export. VAT is applied to everything, including domestically produced things. German cars pay the same VAT which makes it fundamentally different them VAT.
A regular tariff is also paid by the buyer yes, the comment i replied to seems to not understand either concept.
Where the VAT is different is that since all products are taxed the same regardless of origin there is no advantage given to any origin. A tariffs would make the foreign product less attractive. VAT does not.
I already explained why the VAT makes the foreign product less attractive. It's because the foreign product already paid taxes in the country where it was made. So it gets taxed twice, whereas the domestic product is taxed once.
And before you comment, I do understand that the EU allows VAT tax collected in one member country on a product to reduce the amount of VAT tax collected in another member country. There's no such arrangement in place for the US, which is what makes it discriminatory.
Please respond to my actual argument rather than insulting me.
I am unsure what you mean by "the foreign product already paid taxes in the country it was made" in this case. The VAT is done on the buyers side. The foreign product is taxed by the importing entity in the country with the VAT, then by the consumer when they buy the product from the importer.
For the consumer there is no difference between the foreign and domestic product and therefore there can be no difference in how attractive it is.
Because it is single market. Just like inter-state commerce inside USA.
Now why the corporations inside USA have failed to lobby mechanism that allows them to get refunds on sales taxes when they export stuff is reasonable question to ask.
> Because it is single market. Just like inter-state commerce inside USA.
No. The US doesn't do this for interstate commerce. For example, California doesn't reduce its sales tax on an item just because Illinois already charged some other tax on that item.
> Now why the corporations inside USA have failed to lobby mechanism that allows them to get refunds on sales taxes when they export stuff is reasonable question to ask.
It's not the job of US corporations to fix discriminatory tax and tariff schemes cooked up in Europe.
On the other hand, in Washington, some people are starting to take notice. If the Europeans want to slap a 20% price increase on US goods, we also know how to do that for European goods.
You should negotiate with Trump if you think American taxes are too high. Unless EU attacks US militarily and takes their territory, USA taxes are not their issue.
By this logic an American state should remit the sales tax they collect on imported cars back to Germany. The Germans would probably love this, twice as many German products are sold in the US as US products sold in Germany.
Sales Tax, Value Added Tax, Goods and Services Tax, are all taxes on consumption. They are paid by the consumer at the location of the consumption. They aren't a tax on production or producers.
> The reason is because the imported good already paid taxes in the country it was produced in.
The German corporate tax rate is 29.9% vs 21% for the US (from googling). If Germany is anything like my nearby country there are also additional taxes which the US may or may not have (probably not).
Why doesn't the US just raise their own sales tax on both imports and domestic products?
>and may incite another discriminatory tax on the US side.
The US already has some of these. Eg YouTubers all have to pay taxes to the US government even if they are not US citizens, have never been to the US, and interact with Google Island Ltd.
My understanding is that the basis of this tax is that it's "money earned from American viewers" or something along those lines.
Imagine if every country in the world did something like this.
Sorry, but a VAT is paid for by the final consumer. US suppliers paying taxes would be a manufacturer's sales tax (MST), but they went out of style decades ago. If any states are dumb enough to still have an MST, maybe they should start there.
Read his comment. This guy literally writes exploits for C/C++ software. Of course he wants you to keep using memory-unsafe languages, otherwise his business dries up!
Over 60 years, actually. The coffee industry is regulated the way it is in Kenya because the current government wants it to work that way, not because of "colonialism."
I'm not a linguist but I think this bit of jargon leaked into tech from ham radio, which is old enough that "homebrew" (in the sense of building your own radio set from components) referred to a still-earlier time when people actually did commonly brew their own beer at home. "homespun" retains a similar meaning in general usage.
Maybe I've misunderstood pvg upthread but I assumed "'homebrew' has come to connote scrappy and hip" was about IT/tech because it doesn't have that connotation in the actual context of beer, at least to my knowledge.
Pretending that government IDs are super duper hard to give out is a time-honored American tradition.
After all, imagine if the government had a database with every person's name in it! You'd have like 300 million rows? Nobody's built a computing machine that could do that. And then how would you get the cards to people? You'd have to send out horses and buggies to every corner of the nation. And where would you find enough coachmen to do that, and roads to drive the coaches on???
No, clearly it's unpossible.
So we have to reserve the use of government IDs for really important things, like checking if you can buy cold medicine, and voting must remain insecure.
Government IDs are not a solved problem, and you don't seem to have even tried to consider the issues involved. The key distinction between voting and cold medicine is that you have a right to vote, but not to buy cold medicine. So if you lost your ID, or it's expired, it is not an option to just say "that sucks, I guess you can't vote now".
In fact, as a rule, ID is reserved for things that aren't important, because it is a point of failure.
The point of India requiring identification for benefits is to prevent waste and fraud. And given the number of poor people in India, and the limited amount of money they have to help them, it seems like quite a good thing to do so.
Identifying people is not hard, even for the poorest countries, and it's quite easy to do with modern technology. There is no good-faith reason to oppose it, any more than there is to oppose driver's licenses.
Did you read the article I linked? You keep saying this is an easy thing to do, but don't seem to acknowledge any of the problems it causes. It is not easy to identify people. It is easy to identify people with 99% accuracy. If the remaining 1% are unable to access society, that is an unacceptable risk.
Consider for instance the people who currently exist, don't have government ID, and don't have an accurate record of their birth. Such people exist. Should they just die, or something?
If you don't have a birth certificate, there are other ways to get an ID card. Immigrants do the US do it all the time. Pretending this is some unsolvable problem is ridiculous. It's like saying we can't collect taxes because it's impossible to identify people. When the government needs money, suddenly it's very possible to identify everyone and send them bills. Funny how that works.
What if (and just hear me out here), the mouse was attached to a cord? This would have several benefits. No need to charge or have a battery. The mouse would stay near the computer and not get lost.
Because a lot of people find corded mice annoying?
To be fair though, I've seen multiple computer labs with new iMacs and old wired keyboards and mice (because they don't want them "going missing" or switching places).
It would be very simple for Tether to just hold $1 for each 1 Tether coin. They could invest their cash in safe assets like treasury bills that yield 4% or more. Meanwhile, they pay no interest in Tethers. So they get a 4% return for doing nothing at all.
As far as I know, there is no evidence that they are doing anything else. (There is some evidence that they did something else in the past, when interest rates were way lower.) But this hasn't stopped tons of people from speculating that they are.
> there is no evidence that they are doing anything else
There is a lot of evidence they aren't just buying Treasuries. The only times people looked, the money was being held in weird stuff, including frozen deposits at non-FDIC insured banks and private loans [1].
> It would be very simple for Tether to just hold $1 for each 1 Tether coin.
It would not be "very simple" for them to do this. No commercial bank lets you walk up to the teller with $1B and ask to deposit it, much less $93B. The financial system doesn't work that way. They have to cycle it through bonds on the repo market, which is what most huge firms do.
This seems like annoying pedantry. Holding same-as-cash assets is not rocket science, there are plenty of professionals who could help you with that. On Vanguard you can buy things like T-bills with a few clicks. (I am not suggesting that they're using Vanguard specifically)
You can't run a 120 billion dollar bond trading operation with like 4 people.
That amount of money is a huge amount of work to manage no matter what you are trading.
The simple explanation of how they do this is that they don't have anything close to 120 billion to manage.
It is really a sociological and network experiment of how long fraud can persist when the fraud is in the short term interest of all nodes of the network.
I suspect the reason Bernie Madoff was able to persist for so long is that many of the investors thought he was front running trades because of his position with Nasdaq. People tend to be fine with fraud if they are directly benefiting from the fraud and only risking their capital in the process.
Time is not a good measure of non-fraud. That is just a rationalization because any crypto investor has to basically keep the idea of a tether fraud out of their head at this point considering the risk to the ecosystem would be so catastrophic.
What does actually grow in time is the risk to the network.
> You can't run a 120 billion dollar bond trading operation with like 4 people.
They delegate much of those issues to multiple regulated third parties.
The much referenced NYAG settlement in this discussion never shows they were committing massive fraud. There were periods when reserves included assets like receivables or funds temporarily seized by authorities but there was no finding that USDT wasn’t fully backed. The link to that settlement is thrown around with the implication that “see they are fraudulent” for those who don’t read the details.
I used to think exactly like all the anti-Tether people and conspiracies but the fact is that there exists no evidence for massive fraud and much evidence it isn’t.
But it’s more complicated because the current trading value of a bond is not the same as the expected return you’d get if you hold it to maturity. Last year Silicon Valley Bank and others got into trouble for this reason.
Let’s say you invested $100M into a 10-year bond when interest rates were at 2%. With interest, you’ll be getting back about $122M in ten years. Nice.
But what if you’re a bank and suddenly every depositor wants to withdraw that $100M? You can’t wait ten years. You need to sell the bond. Now you face the problem that interest rates are at 4%. Somebody with $100M can invest it in a 10-year bond that will return $148M instead of your measly $122M. So nobody will pay full price for your 2% bond because they can get a better return elsewhere.
It makes sense for a German car manufacturer to pay taxes to Germany, since the German state provides it with services (roads, police, infrastructure.) It makes no sense for an American car manufacturer to pay taxes to Germany since it gets no services from Germany. (And no, earning the "privilege" of unloading the car from the boat isn't worth 20%.)
If the EU has an interest in making this fair, they can remit the sales tax they collected to the US government. Or they can just accept that this is a discriminatory tax and may incite another discriminatory tax on the US side.
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