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Post by Noel Chan on Jun 10, 2014 0:37:48 GMT -6
China’s value-added tax is paid at each step in the supply chain as a given product moves toward the end user. This tax system is one of the most complex in the world and has a real impact on company's net income. Therefore companies with exposure to China market should manage their VAT operations proactively and strategically. It's important for foreign buyers to know the VAT rebate amount in order to ascertain a supplier’s true pricing. Foreign buyers should also check if their business establishment, withholding agent or recipient reside in a city/province that has implemented the VAT pilot program. Foreign companies should educate themselves on the various exemptions and rebates that are offered. Simply asking your supplier or an accounting expert to outline the VAT rebate rates, processes involved and VAT pilot program. This can help cut costs and forecast the net income more accurately. Full article at Tradegood's Viewpoints
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Post by unlawflcombatnt on Jun 23, 2014 12:10:58 GMT -6
The rebate of the VAT on exports is the equivalent of an export subsidy, and should be offset by an equal Tariff by the US when the good is imported into the US.
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Post by supposn1 on Jul 25, 2014 9:59:19 GMT -6
Noel Chan & Unlawflcombatnt, I agree with the Brooking institute’s evaluation that VAT’s a superior sales tax administrating method. Does China’s VAT significantly differ from the VAT employed by the European Union and many other nations? [I do not believe it’s feasible to replace USA’s entire federal income taxes with VAT but I’m an advocate of such replacement to whatever extent feasible. Unlawflcombatnt, most if not all nations logically rebate their own identified taxes upon their exported goods. Income taxes cannot be identified and quantified as taxes upon goods. Conventional sales taxes cannot identify all intermediate sales taxes collected throughout the entire chains of transactions and processing steps those goods have passed through. The Value Added Taxes enables the European Common market to function. USA should enact a federal VAT. I’m a proponent of replacing federal income taxes with a VAT to whatever extent feasible. I believe after one of the incremental transformation steps, the VAT will approach an unacceptable rate and further transformations will have to be interrupted. .
Respectfully, Supposn
[Excerpted from “ www.brookings.edu/papers/2010/0722_vat_gale.aspx “.
The key distinction is that VATs are collected at each stage of production, whereas retail sales taxes are collected only at point of final sale. As a result, the VAT is easier to enforce and is widely regarded as having a superior administrative structure to a retail sales tax”.
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Post by unlawflcombatnt on Jul 25, 2014 23:55:05 GMT -6
Supposin,
I completely disagree with your advocacy of VATs-- the reasons for which I've explained previously.
The problem with VATs is the relative size of the markets affected.
The US consumer market is, far and away, the largest in the world. It's 20% of entire world GDP. If the US imposed VATs on American goods, it would reduce demand on the US's largest consumer market-- the US consumer market.
This is in contradistinction to all other countries on the planet--all with much smaller domestic consumer markets. Countries exporting to the US--the world's largest consumer market--are harmed far less by imposing VATs on their own domestic goods since their domestic markets are a smaller fraction of their total market.
For example, it's far less damaging to Germany to impose VATs on their own domestic market, considering the relative size of their domestic market compared to their US export market.
In contrast, there are NO export markets for the US that compare with its own consumer market. VAT's raise the end-consumer price on the US's largest consumer market, thus reducing demand.
Though VATs ultimately reduce the price of US goods in export markets, the aggregate size of those markets available to American exports pales in comparison to the US consumer market.
As such, VATs will hurt American producers. VATs will reduce domestic demand far more than they'll increase export demand.
VATs are a very bad idea for the US.
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Post by supposn1 on Jul 26, 2014 18:17:38 GMT -6
Supposin, I completely disagree with your advocacy of VATs-- the reasons for which I've explained previously. ... In contrast, there are NO export markets for the US that compare with its own consumer market. VAT's raise the end-consumer price on the US's largest consumer market, thus reducing demand. Though VATs ultimately reduce the price of US goods in export markets, the aggregate size of those markets available to American exports pales in comparison to the US consumer market. As such, VATs will hurt American producers. VATs will reduce domestic demand far more than they'll increase export demand. VATs are a very bad idea for the US. Unlawflcombatnt, VATs are a superior method of sales tax administration. I suppose it’s not specifically VAT but rather a federal sales tax that you’re opposed to. Comparative to taxes levied upon other bases, the consequences of general sales taxes are proportionally of much lesser reduction of the tax’s base. To the extent that it’s feasible to shift portions of our revenues from taxing net incomes and gross payrolls gross general sales tax basis, I contend that such transfers would be very net beneficial to both our nation’s social and economic best interests. For further discussion of sales taxes refer to: unlawflcombatnt.proboards.com/thread/13804/sales-taxesRespectfully, Supposn
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Post by unlawflcombatnt on Jul 26, 2014 22:02:49 GMT -6
Supposin, I completely disagree with your advocacy of VATs-- the reasons for which I've explained previously. ... In contrast, there are NO export markets for the US that compare with its own consumer market. VAT's raise the end-consumer price on the US's largest consumer market, thus reducing demand. Though VATs ultimately reduce the price of US goods in export markets, the aggregate size of those markets available to American exports pales in comparison to the US consumer market. As such, VATs will hurt American producers. VATs will reduce domestic demand far more than they'll increase export demand. VATs are a very bad idea for the US. Unlawflcombatnt, VATs are a superior method of sales tax administration. I suppose it’s not specifically VAT but rather a federal sales tax that you’re opposed to. Comparative to taxes levied upon other bases, the consequences of general sales taxes are proportionally of much lesser reduction of the tax’s base. To the extent that it’s feasible to shift portions of our revenues from taxing net incomes and gross payrolls gross general sales tax basis, I contend that such transfers would be very net beneficial to both our nation’s social and economic best interests. For further discussion of sales taxes refer to: unlawflcombatnt.proboards.com/thread/13804/sales-taxesRespectfully, Supposn Supposn,
No, again, I completely disagree that shifting taxes away from income and onto sales is a net benefit. To the contrary, the exact opposite is true. It would be disastrous for our economy.
Shifting taxes to sales raises the effective price of goods--thus reducing sales and production demand.
It's detrimental economically because it reduces buying power equally across the board, whereas a progressive income tax reduces buying power on those who spend the smallest % of their income on goods (the more affluent), and reduces it the least on those who spend the highest % of their income on goods purchases (the less affluent).
This isn't about fairness or equality. It's about what works best for the economy.
Progressive income taxes put the highest taxes on those who contribute the least to production demand as a fraction of their income, while putting the lowest taxes on those contribute the most percentage-wise.
It's about putting taxes where they'll do the least economic damage to consumer spending, and resultant production demand.
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