Hacker News Reader

Comment by pmiller2 | Hacker News Reader

> If we can agree that the VAT is levied because the government has added some value to each product sold (value added tax..

What value has the government added to consumer products I purchase in the store, particularly in the USA where tax rates vary from state to state, county to county, or even city to city? There is no national sales tax here, but consumer regulation is still a thing, and factors into the base price of goods.

I’m still genuinely interested in what value you see the government adding, but I think this might be why Americans and Europeans are disagreeing here.

View on HN

Roads, sidewalks, bridges, public transport, education (+ buildings), public libraries, emergency services, hospitals, ( ... the list goes on) are all heavily subsidized by the government here. You could design taxes such that these are all funded by the users but it is much easier to have a VAT that funds them all (at least partially). It's not like you can point to a piece of plastic on your chair and say the government made it, but the whole chair ending up inside your house was made possible, partially, by the government. I think it's fair to pay a bit for that.

Roads, sidewalks, bridges, public transport, education

So why not levy taxes against the land value of those who own the property adjacent to those structures? They are the ones who see the most benefit when the value of their land increases, causing their wealth to increase dramatically. For example, the shop owner derives vastly more benefit from the sidewalk in front of his shop than do the pedestrians who occasionally walk by.

Sales tax is a toll that gets charged to everyone, equally, when the benefits of the spending are distributed unequally.

The government adds value to all our lives, not merely to our consumer goods.

So perhaps a more effective and fair means of paying for it is to recognize that those with higher incomes are the most financially able to support the cost, and develop a progressive income tax that ensures that the highest burdens are put on those with the greatest ability to bear them.

> progressive income tax

European countries have this.

Then why do they need this VAT?

Some costs (e.g. waste management) increase with each sold item.

Then charge for waste management as a separate item. Call it a tax or a service charge, or whatever.

Charging people to pick up their trash generally ends in trash getting dumped or disposed of improperly (eg, contamination of the recycling bin).

I still don’t understand why it’s appropriate to tax bananas in order to fund emergency services.

That's fair and you're entitled to that opinion. Maybe you can propose a solution by filling in the blank:

I understand why it’s appropriate to tax [fill in blank] in order to fund emergency services.

Income. Real estate.

People with high income are more able to pay such a tax, if it’s structured progressively. People with real estate holdings benefit most from emergency services.

Well that is an option. Progressive income taxes are a good thing, I think. I also like VAT as a supplementary method.

We disagree, I guess.

Reply on news.ycombinator.com