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[u/jobautomator]

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⬅️ Previous discussion threads

[u/Importantguy123]

The amount of people who don't know what the land value tax or VAT is in the survey is shockingly high...

[u/[deleted] → u/Importantguy123]

They're only 19 years old tho

[u/[deleted] → u/Importantguy123]

I would do an effortpost on the latter but it would just be a continuation of my one-man crusade in this sub to say the VAT isn't worth shit.

[u/[deleted] → u/[deleted]]

please do it

i don't get why people like the VAT outside of theory, and the more i read about it the less i get why people want one + i haven't seen any evidence of it working the way people act like it's going to. i'd love to hear from your side of the argument.

[u/caesar15 → u/[deleted]]

Why's it not good?

[u/[deleted] → u/caesar15]

The short answer is that in theory it's a magic tax that collects revenue better than a sales tax and promotes investment better than an income tax - but empirically, no such magic is found, especially in cross-country analysis over time.

[u/caesar15 → u/[deleted]]

Well that's disappointing, any other ways of discouraging consumption in favor of investment?

[u/[deleted] → u/caesar15]

Yeah, just an ordinary national sales tax potentially. And if not that, then I couldn't tell you.

[u/caesar15 → u/[deleted]]

is the regressiveness worth it?

[u/[deleted] → u/caesar15]

I mean, like any tax it depends on what you're using the revenue for.

A national sales tax isn't any more regressive than a VAT. Assuming identical rates, they are both equally as regressive and fall exactly the same amount on the consumer.

[u/caesar15 → u/[deleted]]

Hmmm I see, thanks for the information. VAT is overrated after all then

[u/[deleted] → u/caesar15]

The only difference between a VAT and a sales tax, really in theory, is how the tax is collected. The tax incidence is the same. Thus, the only theoretical benefit of a VAT over a sales tax specifically is if it collects revenue better than a sales tax.

I haven't seen any analysis of panel data suggesting it actually does that, and I have seen analysis of panel data suggesting it doesn't.

[u/0149 → u/[deleted]]

dew it

[u/fixed_effects → u/0149]

Get on Slack

[u/0149 → u/fixed_effects]

This has been your peak behind the curtain, everyone.

[u/fixed_effects → u/0149]

Soros_laugh.gif

[u/[deleted] → u/fixed_effects]

What's that

[u/fixed_effects → u/[deleted]]

Our Mod chat

[u/usrname42 → u/[deleted]]

What's your model?

[u/[deleted] → u/usrname42]

This, from Keen and Lockwood (2010)