BusterAg said:
javajaws said:
BusterAg said:
will25u said:
Guess they changed their mind on retaliatory tariffs.
Have to address VAT, and we are good.
With the EU, since they don't really manipulate their currency as much as Asia, the only issues are tariffs and VAT.
You will never get them to remove VAT because it is a consumption tax, not an import tax. Imports and domestic EU goods pay VAT equally.
Don't need to remove VAT, just address it. There are various ways of addressing it.
The EU doesn't charge VAT on exports into the US. This sets up a competition barrier between domestic US manufacturers and EU exporters, because EU income taxes are lower in the EU compared to the government services offered in the EU due to the VAT.
But, we have been round and round about this.
Not charging exporters VAT is no different than giving exporters a tax credit. It is an anticompetitive subsidy.
Of course they don't charge exports VAT because exports aren't consumed within their borders. VAT is a consumption tax on their people.
Look at it this way:
If they charged a VAT on their exports then that would unfairly disadvantage their exports. US companies don't pay VAT on goods sold within the US so why should goods being imported into the US?'
And before you say "Well US companies pay income tax..." - well, EU companies pay income tax too. So how would them paying VAT on their exports be fair trade? They WOULD pay a VAT if the US had a VAT (US companies would pay as well), but we don't so no need to pay one.
You have to understand that their overall tax rate (VAT + corp income tax) is HIGHER than US corp tax alone. And the average EU corp tax is comparable but slightly lower on average than the US corp tax rate (you would need to calculate a weighted average to see how much the difference is, but it would effectively be under 4%).
I'll keep responding to this nonsense that VAT is a discriminatory trade barrier until proven otherwise. And so far, you keep ignoring EU corp tax rates.
