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Politics : The Trump Presidency
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bentway
To: Katelew who wrote (4892)1/5/2017 5:01:14 PM
From: TimF1 Recommendation  Read Replies (2) of 359821
 
But all of the products sold in Europe effectively pay the same sales/VAT tax rate regardless of natural origin (20% in our simplified example, in reality of course there are different rates in different places and on different types of goods, but I'm comparing the standard rate for goods), and all products sold in the US also pay the same rate.

If I'm a European consumer the VAT doesn't make me more likely to buy European. If I'm an American consumer it doesn't make me more like to buy European either.

Sure the American company needs the $120 rather than $105 to break even in Europe, but so does the European country in Europe.

Do you think the balance of trade would shift a ton if the average us sales tax rate went up to 20%?
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