Politics

[shootist~]

Sigh.

Do I have to go into this again? I did it twice already. Did pretty excel tables and everything.

No, it is not making US widgets less competitive.

Widgets in country x, no matter if there's made in the us, or the home country, or on freaking Jupiter. Will ALL have VAT assigned to them, at EXACTLY the same rate. It's a simple tax burden, paid for by the consumer. It isn't discriminating against US widgets, or anyone else's' widgets.

I reiterate, AGAIN. The companies doing the selling aren't paying VAT. It is not a tax burden borne by the US company, or the domestic company. It is borne, purely, and entirely, and exclusively, by the country x consumer, living in country x, who pays it to his own government. The US company has no dog in that fight, and no part in that interaction. The government of that nation likes taxing its citizens to buy things. Simple as that. It doesn't care where they're made.

On the US side, no widgets have VAT assigned, only sales tax. All companies, foreign, domestic or extraterrestrial have a level playing field, once again.

There is no functional difference between VAT and sales tax as it pertains to imports. Except in those situations where a company which is based in a country that DOES levy VAT, tries to sell to their own wholly owned subsidiary in a country that does not levy tax. In that case, the presence of a VAT in their home nation makes selling into a foreign market MORE expensive, granting the US domestic competitor an ADVANTAGE.

There is no possible situation in which the VAT can make a US company selling into Europe less competitive than any local company. Not one. At all.

What VAT DOES do, is act in exactly the same way as ANY OTHER TAX levied by a foreign country at a higher rate than the US does; it allows that higher taxing nation to collect more tax revenue from goods sold in their country. Irrespective of if those goods are made locally, or abroad.

That does mean that an EU nation who sees $100 of goods sold in their home market collects more taxes on that $100 than does the US when they have $100 of goods sold in the US. But once again, it does not matter if that $100 of goods is made in the US, or just down the road. It doesn't for the US, or for the EU market, in fact. The only one who can really complain about that higher tax take is the local consumer. The company doesn't care. They don't pay it.

Complaining about VAT being high is basically complaining that you're upset that the EU taxes their citizens at a higher rate than the US taxes it's citizens. Fair enough, and I'm sure our EU members appreciate that concern, but I don't think the EU government is going to listen to the US dictate their internal taxation policies any time soon. Frankly, nor should they.

You could always lobby your congressman to increase sales tax in the US to match EU VAT if you like? That'd solve your problem just as well, and is probably something more achievable for you as a US citizen than telling EU nations they must drop theirs... You could lobby to bump corporation taxes by 0.5% to meet parity with EU rates whilst you're at it? That'd be even more equitable.

Hopefully third time is the charm!

Sigh, it's so simple I don't even need a spreadsheet. And it's not even close.

Simple example:
Both companies export at $100 per widget delivered, including SG&A. 0 margin to keep it clean, so the sales price is $100 plus 21.8% VAT (EU average) when an imported widget is sold in country X:

= $121.80

And $100 plus 0% VAT when an imported widget sold in country (US of) A:

= $100.

Simple math: Country X's widgets cost 21.8% less when sold in country A Vs country A's widgets when sold in country X.

HUGE competitive issue favoring country X. Period. It's not rocket science.

Sure, some of that is offset by US state sales taxes (4% where I live), but we are talking about taxes at the national level.

And from what Google says, the EU VAT is paid on the full price of an import - in advance - by the seller. [And they even add a tariff at 2x the US rate in some cases. Jez! But that's a different topic.]

Edit to add from Google:
AI Overview:
No, the EU does not charge Value Added Tax (VAT) on exports to the US, as VAT is a consumption tax levied within the EU, and is rebated on goods exported outside the EU.

 

[Alistair]

Sigh, it's so simple I don't even need a spreadsheet. And it's not even close.

Simple example:
Both companies export at $100 per widget delivered, including SG&A. 0 margin to keep it clean, so the sales price is $100 plus 21.8% VAT (EU average) when an imported widget is sold in country X:

= $121.80

And $100 plus 0% VAT when an imported widget sold in country (US of) A:

= $100.

Simple math: Country X's widgets cost 21.8% less when sold in country A Vs country A's widgets when sold in country X.

HUGE competitive issue favoring country X. Period. It's not rocket science.

Sure, some of that is offset by US state sales taxes (4% where I live), but we are talking about taxes at the national level.

And from what Google says, the EU VAT is paid on the full price of an import - in advance - by the seller. [And they even add a tariff at 2x the US rate in some cases. Jez! But that's a different topic.]

Yet in both cases the company doing the selling pockets $100.

The revenue stream for the company reads $100. The profit margin for the company is the same. The company has the same amount of money available to pay wages, or invest in expansion, or spend on advertising. The trade balance, assuming 1 widget coming in, 1 widget coming out, shows $100 of goods imported, and exported. 100-100 = 0 for the deficit.

Whether the local government pockets $4 or $21.80 of the local consumers local currency as a surcharge for allowing them to pay the company the $100 doesn't matter in the slightest to either company. The money isn't leaving the respective country and whilst a higher sales tax (which is what this is, call it sales tax or VAT doesn't matter) might persuade the local consumer to spend a bit less overall (and it does, the US consumer has more purchasing power than any other), it certainly doesn't push them towards, or away, from buying a US good over a local one, or vice versa. So it's not a competitive advantage.

And yes, the company does pay the VAT, then they charge the consumer the VAT, and get to reclaim the VAT they originally paid. Hence only the consumer ultimately pays it. I dug into that in detail back in post #55,009.

At the national level, the 'country as a whole' gets more tax income FROM the 100, but that's not because it's from the US, it's just what they choose to tax. What a given foreign nation chooses to tax is not something that the US has any influence over, nor should they. If it really bothers you that much you can work to bump US taxes to be equivalently extortionate.

That makes it 4 times I've explained this, so I think I'm bowing out. Have a great evening!

 

[fourfive8]

A tax is a tax. I couldn’t give a rat’s arse what it is called or how, when or by whom it is collected. When or where the political/bureaucratic machination is used to collect the tax matters little and is a moot point for the end user.

 

[shootist~]

And as I said in a prior post:

The US is foolish for not having their own version of the VAT - which could be fully or partially offset by lower income taxes.

Which does not change the fact that the EU made item has a competitive advantage when sold in the US.

 

[steve white]

Sigh.

Do I have to go into this again? I did it twice already. Did pretty excel tables and everything.

No, it is not making US widgets less competitive.

Widgets in country x, no matter if there's made in the us, or the home country, or on freaking Jupiter. Will ALL have VAT assigned to them, at EXACTLY the same rate. It's a simple tax burden, paid for by the consumer. It isn't discriminating against US widgets, or anyone else's' widgets.

I reiterate, AGAIN. The companies doing the selling aren't paying VAT. It is not a tax burden borne by the US company, or the domestic company. It is borne, purely, and entirely, and exclusively, by the country x consumer, living in country x, who pays it to his own government. The US company has no dog in that fight, and no part in that interaction. The government of that nation likes taxing its citizens to buy things. Simple as that. It doesn't care where they're made.

On the US side, no widgets have VAT assigned, only sales tax. All companies, foreign, domestic or extraterrestrial have a level playing field, once again.

There is no functional difference between VAT and sales tax as it pertains to imports. Except in those situations where a company which is based in a country that DOES levy VAT, tries to sell to their own wholly owned subsidiary in a country that does not levy tax. In that case, the presence of a VAT in their home nation makes selling into a foreign market MORE expensive, granting the US domestic competitor an ADVANTAGE.

There is no possible situation in which the VAT can make a US company selling into Europe less competitive than any local company. Not one. At all.

What VAT DOES do, is act in exactly the same way as ANY OTHER TAX levied by a foreign country at a higher rate than the US does; it allows that higher taxing nation to collect more tax revenue from goods sold in their country. Irrespective of if those goods are made locally, or abroad.

That does mean that an EU nation who sees $100 of goods sold in their home market collects more taxes on that $100 than does the US when they have $100 of goods sold in the US. But once again, it does not matter if that $100 of goods is made in the US, or just down the road. It doesn't for the US, or for the EU market, in fact. The only one who can really complain about that higher tax take is the local consumer. The company doesn't care. They don't pay it.

Complaining about VAT being high is basically complaining that you're upset that the EU taxes their citizens at a higher rate than the US taxes it's citizens. Fair enough, and I'm sure our EU members appreciate that concern, but I don't think the EU government is going to listen to the US dictate their internal taxation policies any time soon. Frankly, nor should they.

You could always lobby your congressman to increase sales tax in the US to match EU VAT if you like? That'd solve your problem just as well, and is probably something more achievable for you as a US citizen than telling EU nations they must drop theirs... You could lobby to bump corporation taxes by 0.5% to meet parity with EU rates whilst you're at it? That'd be even more equitable.

Hopefully third time is the charm!

For the love of God, no, you don't have to do it again!
(nobody else does either)

 

[Rob404]

I paid $2.50 for a dozen eggs today

I paid 8.17 here in Minnesota

 

[Scott CWO]

I guess I'm not feeling like Vance is a 100% more certain option? That Oval Office Zelensky dust-up left me a little shaken.

I hear you but on about everything else, he has been good.

 

[SaintPanzer]

All I've learned here about a Value Added Tax is it keeps the accountants in full employment tracking the VAT in and VAT out and all that.

What I knew about VAT before I came here is no, the US is not foolish for not having a VAT. Sure, it's nice to say "and lower income taxes", but we all know that's not going to happen, and we know (because I lived there) that countries WITH a VAT charge both the VAT and the income tax, and other taxes besides.

Here's the real killer though. With the income taxes, it's not the marginal rate, or even the top rate. It's the income bracket where the rate applies. So say the country of Orangeland has a top marginal rate of 30%, but the country of Pineland only has a top marginal rate of 25%. We'd all like to live in Pineland, right? Yeah, but in Orangeland, that top rate doesn't hit until $200,000, and the median income is $50,000, where the rate is only 15%. In Pineland, that top rate starts at $55,000. Makes a difference, doesn't it? And then the VAT is on everything on top of that. Good thing that accountant makes a good salary keeping track of all that VAT in and VAT our stuff. He's going to need it.

 

[Opposite Pole]

And as I said in a prior post:


Which does not change the fact that the EU made item has a competitive advantage when sold in the US.

Competitive advantage against whom?

 

[Altitude sickness]

For the life of me I honestly can’t understand why he is so fixated on “peace”…

The argument up until the blow out with Zelenskyy was that the US shouldn’t be paying without obtaining something in return…

There’s a push within the US population to cut spending.. spending on Ukraine was a pretty easy target since much of the US population is ignorant of the history, any strategic value, etc.. and Ukraine is a million miles away as far as they are concerned.. combined with the US being war weary after 20+ years in Iraq, Afghanistan, Syria, etc etc..

So why does Trump care if the Ukrainians and Russians continue to duke it out for another 20 years or if the war ends tomorrow?

The only decision I thought was important to him was whether or not to continue to fund (and get something in return for doing so) or to walk away…

(Understanding it’s more complex than that.. Ukraine is also a tool for leveraging NATO to get righteous on spending, Germany to stop buying Russian energy, etc etc)…

So at this point if it’s clear Z isn’t giving up anything.. why not just walk away and leave it to Europe and Ukraine to figure out? That’s what he said he was going to do…

“Peace” certainly isn’t a genuine motivator..

Removing Trumps ego from the conversation for one moment.

If you look at the Ukrainian/Russia negotiations since Jan 20th through a lens of continuing Bidens actions for the previous 3 yrs. That is. Trump is prolonging the war just as Biden handlers did for 3 years.

Obama gave Ukraine blankets and MREs to prepare for the invasion everyone knew was imminent. And some inside the US helped cause with a nudge.

Biden handlers gave just enough equipment to keep them in the fight but not win too soon.

Trump blows up the first sit down with Zelenskyy. Doesn’t push Putin enough to move the peace ball.

Perhaps the Trump plan is to continue the Obama strategy to destroy both countries.

Now bringing Trumps ego back into the conversation. I’m not sure he could suck up his pride and allow anyone to think his negotiations failed. Even if that is the best strategy to weaken two countries and slightly deplete N. Korean supplies as a bonus.

If Trump doesn’t get a win soon he will focus elsewhere and let them destroy each other with the additional NATO support gained in the last 60 days. And the US will also continue just enough support to see the fighting continue and Putin destroyed from within.

 

[KJE81]

I think that the most important support that the US is currently giving Ukraine is intelligence in the form of satellite images/data and real-time data about the movement of russian bombers. It was clearly visable when Trump stopped the sharing of intelligence after the meeting at the white house, all of a sudden the Ukrainian death toll increased sharply among the civilians. Most likely because Ukrainian authorities could no longer know in advance that russian bombers where airborne/cruise missile had launched etc, they probably also get the predicted trajectories of cruise missiles from the US aswell.

When it comes to equipment this article would seem to suggest that the US share is somewhat less important, apperantly (if its correct) it is due to the fact that US equipment is valued at the cost of buying it new while the equipment sent from Europe is valued as second hand/used equipment that has mostly allready been write-of value wise.

New analysis from Economists for Ukraine: The cost of US aid to Ukraine is less than half the official figures

The US has been the largest country-to-country contributor of aid to Ukraine since the start of Russia’s full-scale invasion in 2022. However, the exact amount of aid provided has become the subject of debate, as generally available data tend to bundle together grants, loans, equipment...

cepr.org

Of course there are much of the equipment from europe that is rather old, mostly the soviet era tanks (T-72) and soviet era war planes but there is also plenty of rather modern tanks (Leopard 2) and Infantry combat vehicles that are modern. I know for example that Sweden alone sent 50 CV90 Infantry Vehicles and 10 Leopard 2 and if I recall correctly they have got a lot of Leopard 2 from other european nations (80 of them if memory serves).

 

[Altitude sickness]

Another point worth making is Zelenskyy must be happy that Trump shamed NATO into getting more engaged. Even if it is out of spite from chiefly liberal European leaders. Most pledged more support only to be seen as contrarian to the U.S. and Trump.

Just as 46% of the US support Ukraine. Funny how that is exactly the same percent that oppose anything Trump does.

Trump cures puppy cancer. 46% are now pro puppy cancer.

Also, I’m curious what percentage of the US population thought Russia was now our friend during the Obama and Hillary “Russia Reset”.

Obama’s cute one liner to Candidate Romney.
“The 1980s called they want their foreign policy back”.

Once again the people that put us in this situation. Obama, Hillary, Biden stir up the 46% to blame Trump that he hasn’t repaired their 12 years of Russia promotion, and Ukraine election interference in 3 months.

 

[Red Leg]

Another point worth making is Zelenskyy must be happy that Trump shamed NATO into getting more engaged. Even if it is out of spite from chiefly liberal European leaders. Most pledged more support only to be seen as contrarian to the U.S. and Trump.

Just as 46% of the US support Ukraine. Funny how that is exactly the same percent that oppose anything Trump does.

Trump cures puppy cancer. 46% are now pro puppy cancer.

Also, I’m curious what percentage of the US population thought Russia was now our friend during the Obama and Hillary “Russia Reset”.

Obama’s cute one liner to Candidate Romney.
“The 1980s called they want their foreign policy back”.

Once again the people that put us in this situation. Obama, Hillary, Biden stir up the 46% to blame Trump that he hasn’t repaired their 12 years of Russia promotion, and Ukraine election interference in 3 months.

I suggest reading the latest Gallup poll to which I provided the link. 69% want continued support for Ukraine of whom 46% want to see it increased. He is bleeding independents on this and the traditional conservative base. Walking away trying to blame an abject failure on Zelenskyy will be a pretty pathetic conclusion to his bombastic rhetoric during the campaign. Combined with an incomprehensible tariff policy that will hit Americans in their pocket books (automobiles in particular), his support on the Hill will start to waver as the mid-terms draw nearer.

He needs to find the courage to threaten Putin.

 

[WAB]

I suggest reading the latest Gallup poll to which I provided the link. 69% want continued support for Ukraine of whom 46% want to see it increased. He is bleeding independents on this, and walking away trying to blame an abject failure on Zelenskyy will be a pretty pathetic conclusion to his bombastic rhetoric during the campaign. Combined with an incomprehensible tariff policy that will hit Americans in their pocket books (automobiles in particular), his support on the Hill will start to waver as the mid-terms draw nearer.

He needs to find the courage to threaten Putin.

His posture as regards Russia is baffling to me. It is inconsistent with our national interests, disregards the culture of Russia and Putin’s motives, and as you point out, does not reflect the will of the American people.

 

[Red Leg]

I think that the most important support that the US is currently giving Ukraine is intelligence in the form of satellite images/data and real-time data about the movement of russian bombers. It was clearly visable when Trump stopped the sharing of intelligence after the meeting at the white house, all of a sudden the Ukrainian death toll increased sharply among the civilians. Most likely because Ukrainian authorities could no longer know in advance that russian bombers where airborne/cruise missile had launched etc, they probably also get the predicted trajectories of cruise missiles from the US aswell.

When it comes to equipment this article would seem to suggest that the US share is somewhat less important, apperantly (if its correct) it is due to the fact that US equipment is valued at the cost of buying it new while the equipment sent from Europe is valued as second hand/used equipment that has mostly allready been write-of value wise.

New analysis from Economists for Ukraine: The cost of US aid to Ukraine is less than half the official figures

The US has been the largest country-to-country contributor of aid to Ukraine since the start of Russia’s full-scale invasion in 2022. However, the exact amount of aid provided has become the subject of debate, as generally available data tend to bundle together grants, loans, equipment...

cepr.org

View attachment 675252

Of course there are much of the equipment from europe that is rather old, mostly the soviet era tanks (T-72) and soviet era war planes but there is also plenty of rather modern tanks (Leopard 2) and Infantry combat vehicles that are modern. I know for example that Sweden alone sent 50 CV90 Infantry Vehicles and 10 Leopard 2 and if I recall correctly they have got a lot of Leopard 2 from other european nations (80 of them if memory serves).

The vast majority of combat systems provided by the US are mothballed "drawdown" inventory that is appropriated at a huge discount over the cost of new systems - they are otherwise simply sitting in storage awaiting eventual demil or a military assistance sale.

As you note, most of the combat platforms, particularly tanks, provided by Europe are Soviet-era inventory of the Eastern European members of NATO. Some, like the Polish vehicles, had been modernized. The numbers of current generation tanks and Infantry fighting vehicles are pretty small regardless of the source.

Also much of the higher end equipment. such as the Patriot and SAMP-T batteries and F-16's, are being provided because the US is back filling the donating nation with replacement systems.

By the way, 80 tanks is only enough to equip a single armor brigade. Current estimates are that the UA's order of battle includes 8 tank brigades and 20-25 mechanized brigades (each of which would have at least one armor battalion).

Neither the US nor Europe is exactly flooding their combat inventory.

 

[TTundra]

History is not going to treat this period kindly

I blame the Democrats

Their utterly absurd policies opened the door to an era of Neanderthals

The US will pay a heavy cost for this period of pretentiousness

Trump thinks he is god’s gift to international politics

Most anti Western nations would probably agree

He is a 40 watt bulb on a neon strip

Modern history has and will continue to bow to the ultimately dollar.

Trade continues and and evolves regardless of any situation so long as the ruling government wants it.

Even genocides are forgiven if business ventures are on the table.

 

[deewayne2003]

I think that the most important support that the US is currently giving Ukraine is intelligence in the form of satellite images/data and real-time data about the movement of russian bombers. It was clearly visable when Trump stopped the sharing of intelligence after the meeting at the white house, all of a sudden the Ukrainian death toll increased sharply among the civilians. Most likely because Ukrainian authorities could no longer know in advance that russian bombers where airborne/cruise missile had launched etc, they probably also get the predicted trajectories of cruise missiles from the US aswell.

When it comes to equipment this article would seem to suggest that the US share is somewhat less important, apperantly (if its correct) it is due to the fact that US equipment is valued at the cost of buying it new while the equipment sent from Europe is valued as second hand/used equipment that has mostly allready been write-of value wise.

New analysis from Economists for Ukraine: The cost of US aid to Ukraine is less than half the official figures

The US has been the largest country-to-country contributor of aid to Ukraine since the start of Russia’s full-scale invasion in 2022. However, the exact amount of aid provided has become the subject of debate, as generally available data tend to bundle together grants, loans, equipment...

cepr.org

View attachment 675252

Of course there are much of the equipment from europe that is rather old, mostly the soviet era tanks (T-72) and soviet era war planes but there is also plenty of rather modern tanks (Leopard 2) and Infantry combat vehicles that are modern. I know for example that Sweden alone sent 50 CV90 Infantry Vehicles and 10 Leopard 2 and if I recall correctly they have got a lot of Leopard 2 from other european nations (80 of them

Better late than never I guess….

How about the EU countries that haven’t made their 2% contributions for the last decade make a simple lump sum payment…..

With compounded interest as a penalty for failure to meet their obligations.

 

[Tundra Tiger]

His posture as regards Russia is baffling to me. It is inconsistent with our national interests, disregards the culture of Russia and Putin’s motives, and as you point out, does not reflect the will of the American people.

A "will" he and his administration leans into heavily for pretty much anything else, to judge by how often it gets mentioned in sound bites.

 

[Pondoro]

I think that the most important support that the US is currently giving Ukraine is intelligence in the form of satellite images/data and real-time data about the movement of russian bombers. It was clearly visable when Trump stopped the sharing of intelligence after the meeting at the white house, all of a sudden the Ukrainian death toll increased sharply among the civilians. Most likely because Ukrainian authorities could no longer know in advance that russian bombers where airborne/cruise missile had launched etc, they probably also get the predicted trajectories of cruise missiles from the US aswell.

When it comes to equipment this article would seem to suggest that the US share is somewhat less important, apperantly (if its correct) it is due to the fact that US equipment is valued at the cost of buying it new while the equipment sent from Europe is valued as second hand/used equipment that has mostly allready been write-of value wise.

New analysis from Economists for Ukraine: The cost of US aid to Ukraine is less than half the official figures

The US has been the largest country-to-country contributor of aid to Ukraine since the start of Russia’s full-scale invasion in 2022. However, the exact amount of aid provided has become the subject of debate, as generally available data tend to bundle together grants, loans, equipment...

cepr.org

View attachment 675252

Of course there are much of the equipment from europe that is rather old, mostly the soviet era tanks (T-72) and soviet era war planes but there is also plenty of rather modern tanks (Leopard 2) and Infantry combat vehicles that are modern. I know for example that Sweden alone sent 50 CV90 Infantry Vehicles and 10 Leopard 2 and if I recall correctly they have got a lot of Leopard 2 from other european nations (80 of them if memory serves).

This list is very enlightening....the new US government speak of USD350 - 400 billion worth in aid..its nuts.

One has to wonder.. all these lies and exaggerations..seems to pathological with these people..

 

[deewayne2003]

This list is very enlightening....the new US government speak of USD350 - 400 billion worth in aid..its nuts.

One has to wonder.. all these lies and exaggerations..seems to pathological with these people..

How much of that aid was provided after Trump got in office?

How much of it has been delivered vs promised?

How many billion euros would it take for the EU simply to make up for all the years they didn’t meet their 2% nato contribution?

How many billions of euros have been funded to Putins war machine through German gas purchases?

Germany when asked how many Russian bombs have been purchased with German energy purchase profits….