JimBowie1958
Old Fogey
- Sep 25, 2011
- 63,590
- 16,776
- 2,220
The freaking EU goombas are using a stealth tariff in the form of VAT taxes and tax forgiveness to advantage their exports like mad.
http://www.ohfairtax.org/FAQ/FAQImports.htm
American companies operate under a servere disadvantage compared to our foreign competitors. A company producing a good or service in the United States must pay the employer portion of the payroll tax, which amounts to 7.65% of their total labor costs. In addition, any company incorporated in the US, or private company owned by an American, must pay income tax on any profits realized when they sell their products or services in the US. This income tax may be as high as 35% of their net profit.
These costs are incorporated into the prices of the products and services, and passed along to their customers as embedded, or hidden, taxes. Taken together, these embedded taxes constitute anywhere from 15% to as high as 25% of the price charged for the manufactured good or provided serve.
In addition, because our tax code is so complex, requires extensive recordkeeping and documentation, and changes substantially from year to year, there is a significant compliance cost with operating a business in the United States. A combination of studies in 1993 and 2008 show that tax code compliance costs may be as high as 10% of business profits (Average profits of 6% of sales, tax code compliance costs at .6% of sales). A 2011 study by Laffer showed that overall income tax compliance costs for business totalled $162 billion for 2008.
Summarizing, American produced goods and services have a total income tax penalty of between 16% and 26% of sales price. This places a tremendous burden on American manufacturers, and make competition with imports difficult....
Most foreign countries have taxes that are comparable to our own, although our business taxes are the second highest in the world. In these countries, they use a combination of Value Added Taxes (VAT) and income taxes to finance their governments. And these taxes are applied to goods and services sold within that country.
But, almost all other countries have what is called a "border adjustment". Goods that are shipped out of the country have the taxes removed so the goods are essentiall "tax free". If the goods are shipped to and sold in another country that uses a VAT system, then the VAT is applied, and the goods are sold with the host countries VAT included in the price....
Since the US uses an income tax system, and does not have any border adjustment mechanism, imported goods can be sold in the US essentially tax free. The only taxes incorporated into the price of imports are the very small ones noted above.
http://www.ohfairtax.org/FAQ/PDF/Balance of Payments (import-export) 1960-2010.pdf
http://www.ohfairtax.org/FAQ/FAQImports.htm
American companies operate under a servere disadvantage compared to our foreign competitors. A company producing a good or service in the United States must pay the employer portion of the payroll tax, which amounts to 7.65% of their total labor costs. In addition, any company incorporated in the US, or private company owned by an American, must pay income tax on any profits realized when they sell their products or services in the US. This income tax may be as high as 35% of their net profit.
These costs are incorporated into the prices of the products and services, and passed along to their customers as embedded, or hidden, taxes. Taken together, these embedded taxes constitute anywhere from 15% to as high as 25% of the price charged for the manufactured good or provided serve.
In addition, because our tax code is so complex, requires extensive recordkeeping and documentation, and changes substantially from year to year, there is a significant compliance cost with operating a business in the United States. A combination of studies in 1993 and 2008 show that tax code compliance costs may be as high as 10% of business profits (Average profits of 6% of sales, tax code compliance costs at .6% of sales). A 2011 study by Laffer showed that overall income tax compliance costs for business totalled $162 billion for 2008.
Summarizing, American produced goods and services have a total income tax penalty of between 16% and 26% of sales price. This places a tremendous burden on American manufacturers, and make competition with imports difficult....
Most foreign countries have taxes that are comparable to our own, although our business taxes are the second highest in the world. In these countries, they use a combination of Value Added Taxes (VAT) and income taxes to finance their governments. And these taxes are applied to goods and services sold within that country.
But, almost all other countries have what is called a "border adjustment". Goods that are shipped out of the country have the taxes removed so the goods are essentiall "tax free". If the goods are shipped to and sold in another country that uses a VAT system, then the VAT is applied, and the goods are sold with the host countries VAT included in the price....
Since the US uses an income tax system, and does not have any border adjustment mechanism, imported goods can be sold in the US essentially tax free. The only taxes incorporated into the price of imports are the very small ones noted above.
http://www.ohfairtax.org/FAQ/PDF/Balance of Payments (import-export) 1960-2010.pdf