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Comment by pvaldes | Hacker News Reader

The money came from taxes, but taxes must be progressive. To tax the same to all people regardless of their income is unfair (and to punish people when they purchase goods and services is clearly stupid).

Take in mind also that you need to advance the VAT to the government each three months. Including money that could be still unpaid to you (or worse, that will never be paid because some big clients can blackmail small companies easily in that sense). This is a problem for a small company that is thus forced to eat the loses and lend a money to the government, even if they do not really have this money. Is bassically sucking money from the people that create and maintain jobs.

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Ok, but they get almost as much from VAT as from income tax (78/67) so I let you calculate how much would your tax rate increase if the VAT was to be supressed (given that you want more progressivity you [#] would probably end up paying well above 50% in income tax).

Anyway, the VAT is more likely to go up than down, given that it is not high relative to other European countries.

[#] edit: assuming "you" have relatively high income, of course, which I think would be the case for the OP (median salary is below 20k).

They have raised the VAT before. The result was that the consume sank, a lot of commerces closed, and the government collected less money from VAT than before (21% of zero is zero). People 1) think that is an abuse and are very upset or 2) just can't afford it and start lowering its expectatives (i.e buying chinese cheaper products, instead made in germany) or 3) are forced to start doing all business out of the law just to survive. In the end the harvest is that populism and nationalism is growing in Europe; governments need to spend more resources to fight against the fraud, european companies need to spend a lot time in unproductive bureaucracy instead to focus in selling its products, and nobody is happy.

Europe can raise the VAT as many as they want. They are only shooting themselves in the foot, damaging the growth expectatives of the european companies and carefully nurturing the anti-european parties.

>"To tax the same to all people regardless of their income is unfair ..."

Is the income tax not progressive in Spain then? Everyone pays the same marginal tax rate?

VAT is a tax of different nature. Is a trick from governments to be able to tax children and elders for example. Everybody pays the same VAT for the same product.

> Is a trick from governments to be able to tax children and elders for example.

I'm not sure what kind of virtue signalling is that, but I highly doubt that the problem they try to solve with VAT is "how can we tax children and elder people?" and more like "how can we collect more tax to build a fairer society based on our social democratic point of view? So we can cover also services for people not paying income tax."

I would really urge you to refrain from being that cynical :) it will only make you sour.

Oh I see the part of the comment I quoted was referring to VAT and not an income tax.

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