Visually Cheating the Population

[timmie 988]

I have a packet of crisps (trololol) here and it is 75% full. Is there more air in American packets?

[AkemiAzula 280]

Back in Aus my wallet would always be full to bursting wit 50 c pieces in my change so yeah I agree on resizing that monster. Here in the UK the 50 p is quite modest only about the size of a 20c piece

 

Also just as a random aside someone gave me a birthday present a while ago a 1991 (year I was born) USA mint set and that had a 50 c piece (cupro nickel mind you)

[TekindusT 3,809]

All this thread now explains why I always find some chips in my full-of-air bags I buy at the supermarket...

[A Nonny Moose 8,262]

In the end, one shouldn't complain about air.  You need many litres of it daily.

[Duke87 1,070]

It is mentioned on our receipts too, and I think also on the price tags in shops. Typically, there's a line that mentions how much VAT (called BTW/TVA in my country) you payed. Three categories exists, as far as I know: 21%, 12% and 6%.

 

Your example also exists in Europe. People in construction can buy materials with only 6% tax, whereas ordinary citizens would pay 21%. How this works in practice, I don't really know. There are also examples where you can deduct the taxes on your tax declaration (we love deduction, our tax forms are among the most complicated in the world).

 

 

21%!? Oh, right, Europe. New York's sales tax tops out at 8.875% and we think that's high. Connecticut's is 6.25%. New Jersey's is 7%. Delaware's is 0%!

[Meg 368]

 

 

It is mentioned on our receipts too, and I think also on the price tags in shops. Typically, there's a line that mentions how much VAT (called BTW/TVA in my country) you payed. Three categories exists, as far as I know: 21%, 12% and 6%.

 

 

 

 

VAT.  I never understood the Value Added Tax.   Can someone explain it using simple words?  I can't seem to wrap my old brain around the concept.    What constitutes enough added "value" for it to be taxed?

[Mr Saturn64 742]

Well, in the US there's a chance that the whole 1/2 full=full price issue might be cutting down in obesity, which is a current issue here (I'm underweight, though). But that's just cheap. This happens to me all the time, so I only noticed it once and turned to my friend and said "look at this crap" and the newly opened bag was 1/4 full at best.

[timmie 988]

VAT was originally introduced as a European tax. The member states had to introduce such a tax in the early '70s, and a big part of the income it still automatically goes to the Union (the minimum VAT is 15%, says the EU regulation).

 

Wikipedia:

The purpose of VAT is to incentivise the production of critical resources required to sustain an economy, in the form of VAT-exempt goods. In the absence of VAT, an economy may tend towards production of services that can not sustain it - ie. if all farmers became lawyers, everyone would starve. VAT also incentivises businesses to spend on expanding their operations, as much of the expenditure on expansion can be deducted from the VAT payable to the revenue service.

 

It's just an indirect tax, really. If I remember well from my course on public finances, the income from VAT is more stable than from income taxation and corporate taxes, that might be a reason to diversify the taxes.

 

The concept of value added is simply 'revenue minus expenses'.

[A Nonny Moose 8,262]

Save all the spin.  VAT = Sales Tax in North American terms.

[BLANKBLANK 4,414]

With every passing year money buys you less. Supermarkets wage price wars and yes they keep the price down, but they do by reducing the portion or amount of food/drink in various products. But, and this is the big but, to maintain the illusion of a product which has been reduced, they keep the same size packaging and whatever else to keep you fooled.

 

Inflation is an absolute curse. To think in the seventies in the US you could get by with several hundred dollars per month, now you need several thousand to ensure a decent quality of living. Going further back, right up to 1913, the dollar had even more purchasing power, and to think the US dollar has devalued by 98% since 1913 (Federal Reserve cough, cough). The way things are going, give it 25 or 30 years and most of us will be millionaires!

 

At that stage I think everyone will realise what a sham our monetary system is!

[AkemiAzula 280]

I never approved of inflation or 'quantitative easing'. I am an austerity man myself. I believe in simplicity, clarity and honesty. In my ideal world we'd have decimal clocks, everything would cost an increment of a dollar/pound and we'd all live in cubes. Well maybe that's going too far, and as a coin collector I admit I would turn a blind eye to the return of predecimal currency and silver coinage. (Which is arguable more honest than cupronickel purely because it is referred to as silver).

 

In Simcity I never touch the tax rate unless I want to attract to a large degree or deter to a large degree. I leave it at 9-9-9. I'd rather 10-10-10 though. Then again I am all for free public transportation funded by a tax. VAT makes sense for the reason stated above, as an incentive. However regarding quantitative easing I've always preferred to keep things honest. A dollar should be worth a dollar.

[A Nonny Moose 8,262]

So, Mark, you are a tax and spend democrat?

[FreewayofFlight 41]

I just paid my South Carolina Vehicle Tax: $63.83

 

I drive a 1998 Mercury station wagon, the actual assessed tax was only $9.83

 

But because of the State Registration fee and a Road Maintenance fee, it got jacked up to the price you see on the first line.

 

I can understand the registration 'fee', but the maintenance fee should just be called a tax. It annoys me that the 'fees' are higher than the actual tax.

[A Nonny Moose 8,262]

Road maintenance fee should be freed of the spin and truthfully call road user tax or general road toll.

 

I guess you got your new, valid for one year, license plate tabs for the State Registration Fee, a.k.a. Car license (renewal) tax.  Anything charged by a government is a tax, (pronounced tacks because it sticks you). 

 

The term "fee" is one of the worst examples of "spin".  Lawyers and other professionals have fees.  Government has taxes.

 

You see the cheating is not limited to packaging, but also to semantics as well.  Tax is pejorative, fee has about the same weight as price.

 

For all the screaming we do about taxes, they are the price of the government.  Now is it worth it?  Are you getting performance for your taxes?

[FreewayofFlight 41]

In my area, some roads are in the process of being repaved and various other projects around the county are currently in the works. I've noticed a few traffic signals are being swapped out too. Obviously taxes are apart of civilized life, but I'd prefer if our governments were up front about it and not using 'fees' or 'services charges' to sneak their way around it.

[timmie 988]

VAT is not exactly the same as sales tax, but it's generally the same idea, I think.

 

This article explains it.

[A Nonny Moose 8,262]

Yeah, I knew that, but I believe in simplifying if possible.  No matter how you spin it, it is tax.

[Duke87 1,070]

VAT is collected in increments at every stage of production, rather than at the point of retail sale, and is based on the markup rather than the sell price. Let's use a simple example:

 

Acme inc. buys two parts to make a widget, which cost $10 and $15. They then sell the widget at wholesale for $30 (markup of $5), and MegaMart sells it at retail for $40 (markup of $10).

 

Under a system of 10% sales tax, the consumer pays $4 in tax on top of the $40 base price, for a total cost of $44.

Under a system of 10% VAT, Acme pays 50 cents tax on their $5 markup such that it effectively sells at wholesale at $30.50, and MegaMart pays $1 on their $10 markup such that the final retail price is $41.50.

 

One stated benefit of doing it the latter way is that the taxes never compound upon each other. Under a sales tax system, Acme may have paid sales tax when buying one of their parts, which drives up costs down the supply chain from there and means that the consumer is in effect paying tax on tax.

Another benefit is that because VAT relies upon manufacturers to pay the tax rather than retailers, evasion of the tax is much more difficult. A lot of small retailers will sell things "off the books" when someone pays with cash and not collect any tax on the transaction. If part of the tax is already included in the price the retailer paid wholesale for the product, there is less incentive to do this.

You can also see then why with VAT the tax is included in the listed price - if it's already been collected at prior stages it is difficult not to.

[AkemiAzula 280]

Sounds very complicated but I sort of get why they do it that way. Must be very difficult to determine where and how much to tax individuals/organisations... 

 

On road tax I recently read an article on cyclists in the paper and in the UK there isn't such thing as road tax, apparently local government is responsible for that spending. Not sure what is used to raise the funds for that, I imagine vehicle related tax of some sort finds its way to road maintenance?

 

Even with such a simple example as the one of the widget manufacturer there appears to be a problem with rounding figures. 

 

The production/sourcing-manufacture/conversion-retail/selling chain seems straightforward enough. Then they had to invent the internet. How would you calculate how much to tax digital transactions and services... No wonder Google is getting away with massive tax avoidance... Gotta hand it to them they must have brains. I'd just pay whatever I had to, I am not nearly complicated enough to get around all this.

 

Unlike in good old Simcity with nice clear definitions between the three zone types and a flat initial tax rate... Note in Simcity there aren't any work-from-home or digital businesses, just traditional houses of business with bricks and mortar outlets. 

 

I imagine it might not work to have a flat rate of universal taxation, and to implement it would also be difficult. To think how simple it all began as merely taking a percentage of crops from a farm and so forth. Certainly taxation seems to be a great science and art unto itself... 

[A Nonny Moose 8,262]

So?  Taxes are collected at almost every transfer point in any system.  I don't think there is anything particularly unique about VAT.  It is just a cover name.  Elsewhere these things are called transfer taxes, stumpage, etc. and in the end you get a sales tax.  In Ontario, the provincial tax and the federal tax are blended into a 14% Harmonized Sales Tax (HST), which the voters of B.C. just chucked out.

[AkemiAzula 280]

I think I finally get the markup based tax rate... They're taxing actual profit made by the manufacturer and retail firms, not the amount of a finished retail article or total of sale cost?

 

In which case I suppose that makes sense, although it must be a headache for tax investigation authorities to wade through the paperwork that must be necessary... 

 

Anyway today we were given some packs of crisps at work and there was about a quarter of a potatoe's worth in each pack

[Meg 368]

VAT is collected in increments at every stage of production, rather than at the point of retail sale, and is based on the markup rather than the sell price. Let's use a simple example:

 

Acme inc. buys two parts to make a widget, which cost $10 and $15. They then sell the widget at wholesale for $30 (markup of $5), and MegaMart sells it at retail for $40 (markup of $10).

 

Under a system of 10% sales tax, the consumer pays $4 in tax on top of the $40 base price, for a total cost of $44.

Under a system of 10% VAT, Acme pays 50 cents tax on their $5 markup such that it effectively sells at wholesale at $30.50, and MegaMart pays $1 on their $10 markup such that the final retail price is $41.50.

 

 

Sounds like I just need to get over the words "value added".   In this example, Acme did not "add any value" to the widget; they just unpacked it from a box and put it on a shelf.   I suppose that is adding value in the sense that it is making it available to the consumer but, still, it sounds like "profit tax" would be more accurate.   But I'll stop mincing words.

[Mr Saturn64 742]

No value was added, it was more like value taken away.

[AkemiAzula 280]

Yeah it seems like 'profit based tax' would be more appropriate

 

PT is digestible enough for the layman. Time for a PR update? PT sounds way more catchy and logical than 'VAT'

[A Nonny Moose 8,262]

Acronym demystification.

 

VAT ::= Vast Additional Tax

GST ::= Go Shop in Tonawanda (NY) for residents of the Golden Horseshoe.

[Mr Saturn64 742]

Opened up a bag of Andy Capp Cheddar Fries today (local brand?) and the bag was at best 1/3 full. Stupid, stupid stupid...

[ROFLyoshi 1,760]

The chip argument is one of my most despised arguments. Back to point, the air is there for cushioning, it's actually 100% nitrogen which stops them going stale, and besides you aren't really being cheated as chips are sold by weight and the weight is clearly stated on the packet.

[A Nonny Moose 8,262]

Opened up a bag of Andy Capp Cheddar Fries today (local brand?) and the bag was at best 1/3 full. Stupid, stupid stupid...

1.  Is the Saturn Valley in the UK?  (Andy Capp)

2.  Did you analyze the gas in the bag?  It was probably pure nitrogen for reasons stated above.

[Mr Saturn64 742]

Saturn Valley is a fictional location, from the same game as Mr Saturn.

And I didn't. Maybe?

[A Nonny Moose 8,262]

^ Maybe you should try living in the real world.  It can be fun, and definitely better than a finite automaton.