alt Hacker NewsThat’s the most convoluted way of explaining taxes I have ever seen. By that logic nobody pays any taxes. Of course neither economists nor the government feel that way about taxes (including VAT), which is the reason why foodstuffs have a lower VAT.
That’s the most convoluted way of explaining taxes I have ever seen. By that logic nobody pays any taxes. Of course neither economists nor the government feel that way about taxes (including VAT), which is the reason why foodstuffs have a lower VAT.
Most non-luxury foodstuffs have a lower (often zero) VAT for the same reason that certain organisations pay zero VAT, and income tax is progressive. It has a similar effect as a subsidy, although the psychological interpretation is different (and you can't discount human behaviour when modelling an economy).