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Comment by simne | Hacker News Reader

I'm sorry, but could you provide link, where stated, VATs applied to import?

- As I know, usually VAT deducted from exported goods, but I really don't know how VAT work with import - usually on import used tariffs.

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The VAT is applied at the time of sale to the end consumer, it's irrelevant if the product is imported or manufactured locally.

So strange to take VAT into account when it's not discriminating between local or import. By that logic the US has a 5-10% tariff on everything too since we have sales tax in like 47 states.

The thinking may be that the asymmetry in taxes itself cause a trade imbalance. What can the country do with the extra tax money they receive compared to the lower tax country? They can spend it to fund infrastructure, goods, and jobs inside their own borders.

Which are paid by the country's citizens

As are tariffs.

Yes, but tariffs are not paid on local products, of course, and create a real asymmetry in favour of the local products (of course).

Yes, we're on the same page I think. For context, this thread was originally about to what extent VAT is comparable to tariffs. For example, say country A has a end-consumer tax of 20% and country B has one of 10%, and neither has tariffs or other trade barriers. On the surface, we might expect country B to have a trade surplus due to having comparatively cheaper exports. But what if they instead they have a deficit?

Country A is less dependent on B than the other way around, and they are able to enrich their country with the extra tax revenue. Maybe they even use this tax revenue to invest or incentivize what's needed to become even less dependant on country B. Now suppose country B increases their tariff until the trade balance is zero. In this scenario, all country B is really doing is increasing their own tax revenue to match that of country A.

Ok. Taking this argument completely in good faith, does it follow that they think no country should be allowed to have any sales tax? Or that it’s an act of economic oppression for any country to have a higher sales tax than our country does? I’m just confused, do they propose every country should abolish all their sales taxes to appease this strange and pretty novel point of view.

I feel like Trump or whoever is running this import tax show has lost the plot on what they’re trying to accomplish.

Well, in the end actually nothing else than the trade differences were considered, anyhow: https://xcancel.com/JamesSurowiecki/status/19075591892341969...

I don't know if anyone's necessarily saying that. I think it's a matter of "if tax differences cause trade imbalances, then increasing tariffs by the other side is basically a fair response, since it is also a tax."

https://vatdesk.eu/en/import-export-and-vat/#:~:text=of%20VA...

>Yes, imports of goods are subject to VAT, with taxation taking place when the goods clear through customs.

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