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Politics : The Trump Presidency -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (4682)	1/4/2017 2:35:40 PM
From: Katelew	Read Replies (2) \| Respond to of 354107

You missed the part where the VAT gets rebated back to the manufacturer of the German car when it became an export.

To: bentway who wrote (4682)	1/4/2017 2:43:54 PM
From: Steve Lokness	Read Replies (1) \| Respond to of 354107

<<< since it pays it all along the production chain>>>> I think you might misunderstand how a VAT works. If the VAT is 20% that is the total tax; it gets paid by various companies depending on how much "value" they added to the final product.

To: bentway who wrote (4682)	1/4/2017 2:54:31 PM
From: Katelew	Respond to of 354107

Also, the author of the Forbes article turned out to be a metals trader, not an economist, and he is based in London! It wasn't even really an article, more of a blog post or something. At any rate, I find it quite odd and it doesn't reflect well on Forbes, imo. I decided that since he's a European, maybe he doesn't even know that VATs are rebated once the European manufactured product becomes an export. If you are wondering why VATs are rebated, it's because the European good, as Krugman points out, will face a sales tax at the end. The US car manaufacturer, on the other hand, will pay the 19% VAT to Germany, but it won't be subjected to a sales tax. But later, to top things off, the US car manufacturer will pay an income tax to the US govt. on each car it sells. It creates double taxation in essence.