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Text of the page (random words):
avoidance share repurchase tariff engineering tax credit tax deduction tax exemption taxpayer groups tax holiday tax inversion tax farming tax patent tax shelter illegal tax evasion tax amnesty black market debtors prison tax exile smuggling tax resistance transfer mispricing unreported employment locations tax havens corporate havens offshore financial centres ofcs offshore magic circle conduit and sink ofcs financial centres financial secrecy index major examples ireland as a tax haven ireland v commission leprechaun economics liechtenstein tax affair luxembourg leaks offshore leaks paradise papers panama papers swiss leaks united states as a tax haven panama as a tax haven types direct indirect per unit ad valorem aviation airport improvement landing solidarity capital gains exit consumption departure hotel sales stamp television tourist value added digital goods dividend environmental tax carbon eco tariff landfill natural resources consumption severance steering stumpage excise alcohol fat meat sin sugary drink tobacco general georgist gift gross receipts hidden hypothecated income inheritance estate internet tax land value luxury mining on childlessness payroll pigouvian property resource rent single stealth surtax turnover use user charge fee congestion fuel road gnss toll vehicle miles traveled corporate profit excess profits windfall negative income wealth international financial transaction tax attac currency transaction tax european union common consolidated corporate tax base ccctb global minimum corporate tax rate robin hood tax tobin tax spahn tax tax equalization tax treaty exchange of information permanent establishment transfer pricing european union ftt foreign revenue rule trade custom duty tariff import export tariff war free trade free trade zone trade agreement ata carnet research academic mihir a desai dhammika dharmapala james r hines jr ronen palan joel slemrod gabriel zucman advocacy groups institute on taxation and economic policy itep oxfam uk tax foundation us tax justice network tjn tax policy center us religious church tax eight per thousand teind tithe fiscus judaicus leibzoll temple tax tolerance tax jizya kharaj khums nisab zakat by country all countries list of countries by tax rates tax revenue to gdp ratio tax rates in europe individual countries albania algeria argentina armenia australia azerbaijan bangladesh bhutan brazil bulgaria bvi canada china colombia croatia denmark finland france germany greece hong kong iceland india indonesia iran ireland israel italy japan kazakhstan lithuania malta morocco namibia netherlands new zealand norway pakistan palestine peru philippines poland portugal russia south africa sri lanka sweden switzerland taiwan tanzania united arab emirates united kingdom united states uruguay business portal money portal v t e a consumption tax is a tax levied on consumption spending on goods and services the tax base of such a tax is the money spent on consumption consumption taxes are usually indirect such as a sales tax or a value added tax however a consumption tax can also be structured as a form of direct personal taxation which is known as an expenditure tax tax rate by country edit here are consumption tax rate by country state for oecd countries 1 2 3 4 consumption tax rate by country for oecd countries country consumption tax vat gst australia 10 austria 20 belgium 21 canada 5 chile 19 czech republic 21 denmark 25 estonia 22 finland 25 5 france 20 germany 19 greece 24 hungary 27 iceland 24 ireland 23 israel 18 italy 22 japan 10 korea south korea 10 luxembourg 17 mexico 16 netherlands 21 new zealand 15 norway 25 poland 23 portugal 23 slovak republic 20 slovenia 22 spain 21 sweden 25 switzerland 8 1 turkey 20 united kingdom 20 consumption tax rate by state of the united states state consumption tax vat gst alabama 4 alaska 0 arizona 5 6 arkansas 6 5 california 7 25 colorado 2 9 connecticut 6 35 delaware 0 florida 6 georgia 4 hawaii 4 idaho 6 25 illinois 7 indiana 6 iowa 6 5 kansas 6 kentucky 6 louisiana 6 maine 6 maryland 6 25 massachusetts 6 michigan 6 875 minnesota 6 25 mississippi 4 225 missouri 6 montana 0 nevada 6 625 new hampshire 5 new jersey 4 75 new mexico 4 new york 5 75 north carolina 5 75 north dakota 6 25 ohio 6 5 oklahoma 0 oregon 6 25 pennsylvania 7 rhode island 6 south carolina 6 south dakota 6 25 tennessee 4 types edit value added tax edit a value added tax applies to the market value added to a product or material at each stage of its manufacture or distribution for example if a retailer buys a shirt for twenty dollars and sells it for thirty dollars this tax would apply to the ten dollar difference between the two amounts a simple value added tax is proportional to consumption but is regressive on income at higher income levels as consumption tends to fall as a percentage of income as income rises savings and investment are tax deferred until they become consumption a value added tax may exclude certain goods to make it less regressive against income it is common in european union countries value added tax is a consumption based tax and is levied each and every time the value of a good gets increased in the process of manufacturing to the point of sale in australia canada india new zealand and singapore it is instead called a goods and services tax in canada it is also called harmonized sales tax when it is combined with a provincial sales tax sales tax edit sales tax is a consumption tax applicable to sales of goods and services a sales tax typically applies to the sale of goods and sometimes includes the sales of services the tax is applied at the point of sale the tax amount is usually ad valorem that is it is calculated by applying a percentage rate to the price of a sale when a tax on goods or services is paid to a governing body directly by a consumer it is usually called a use tax often laws provide for the exemption of certain goods or services from such taxes laws may allow sellers to itemize the tax separately from the price of the goods or services or they may require it to be included in the price excise tax edit an excise tax is a sales tax that applies to a specific class of goods typically alcohol tobacco gasoline petrol or tourism the tax rate varies according to the type of good and quantity purchased and is typically unaffected by the person who purchases it sin taxes are a type of excise tax imposed on items that are considered harmful to society in an effort to decrease their consumption by increasing their prices expenditure tax edit a direct personal consumption tax may take the form of an expenditure tax that is an income tax that deducts savings and investments such as the hall rabushka flat tax 5 a direct consumption tax may be called an expenditure tax a cash flow tax or a consumed income tax and can be flat or progressive expenditure taxes were briefly implemented in the past in india see expenditure tax act 1987 and sri lanka 6 this form of tax applies to the difference between an individual s income and any increase decrease in savings simple personal consumption taxes are regressive with respect to income however because this tax applies on an individual basis it can be made progressive just as income tax rates increase with personal income progressive consumption tax rates increase with personal consumption economists from milton friedman to edward gramlich and robert h frank supported a progressive consumption tax 7 8 9 history edit consumption taxes specifically excise taxes have featured in several notable historic events in the united states the stamp tax the tax on tea and whiskey taxes produced revolts the first two against the british government and the latter against the federal government in india an excise tax on salt led to mohandas gandhi s famous salt march a major event in the indian independence movement united states edit in the early united states taxes were levied principally on consumption alexander hamilton one of the two chief authors of the anonymous the federalist papers favored consumption taxes in part because they are harder to raise to confiscatory levels than income taxes 10 in the federalist papers no 21 hamilton wrote it is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess they prescribe their own limit which cannot be exceeded without defeating the end proposed that is an extension of the revenue when applied to this object the saying is as just as it is witty that in political arithmetic two and two do not always make four if duties are too high they lessen the consumption the collection is eluded and the product to the treasury is not so great as when they are confined within proper and moderate bounds this forms a complete barrier against any material oppression of the citizens by taxes of this class and is itself a natural limitation of the power of imposing them 11 although personal and corporate income taxes provide the bulk of revenue to the federal government consumption taxes continue to be a primary source of income for state and local governments one of the first detailed proposals of a personal consumption tax was developed in 1974 by william andrews 12 japan edit the liberal democratic party government of masayoshi ōhira attempted to introduce a consumption tax in 1979 ohira met opposition within his own party and gave up on his attempt after his party suffered badly in the 1979 election ten years later noboru takeshita successfully negotiated with politicians bureaucrats business and labor unions to introduce a consumption tax 13 which was introduced at a rate of 3 in 1989 in april 1997 14 under the government of ryutaro hashimoto 15 the rate increased to 5 16 the 5 is split between the national and local governments which receive 4 and 1 respectively 17 shortly after the tax was introduced japan fell into recession 18 which was blamed by some on the consumption tax increase 19 and by others on the 1997 asian financial crisis prime minister junichiro koizumi said he had no intention of raising the tax during his government but after his massive victory in the 2005 election he lifted a ban on discussing it 20 over the following years ldp politicians discussed raising it further including prime ministers shinzō abe 21 yasuo fukuda 22 and tarō asō 23 the democratic party came to power in the august 2009 elections with a promise not to raise the consumption tax for four years 24 the first dpj prime minister yukio hatoyama was opposed but naoto kan replaced him and called for the consumption tax to be raised the following prime minister yoshihiko noda staked his political life on raising the tax 25 despite an internal battle that saw former dpj leader and co founder ichirō ozawa and many other dpj diet members vote against the bill and then leave the party on june 26 2012 the lower house of the japanese diet passed a bill to double the tax to 10 26 despite considerable opposition and an attempted no confidence motion from minor opposition parties the bill was successfully passed through the upper house on august 10 2012 with the result that the tax increased to 8 in april 2014 and to 10 in october 2019 twice postponed from the original date of october 2015 27 28 savings effect edit to the extent that taxing something results in less of it whether income or consumption taxing consumption instead of income should encourage both work and capital formation which increases economic growth while discouraging consumption 7 8 secondly the tax base is larger because all consumption is taxed flat consumption taxes are regressive shift the tax burden to the less well off the ratio of tax obligation to income tends to shrink as income increases because high earners tend to consume proportionally less of their income 29 an individual unable to save will pay taxes on all his income but an individual who saves or invests a portion of his income is taxed only on the remaining income practical considerations edit many proposed consumption taxes share some features with income tax systems under these proposals taxpayers are typically given exemptions and or a standard deduction in order to ensure that the poor do not pay any tax in a flat consumption tax these other deductions are not permitted 7 a withholding system may be put into place in order to approximate the average tax liability smoothing payments it is difficult for many taxpayers to pay no tax all year only to face a large year end tax bill andrews notes the inherent problem with housing renters necessarily consume housing so they would be taxed on the expenditure of rent however homeowners also consume housing in the same way but as they pay down a mortgage the payments are classified as savings not consumption because equity is being built in an asset the disparity is explained by what is known as the imputed rental value of a home a homeowner could choose to rent the home to others in exchange for money but instead chooses to live in the home therefore the homeowner is also consuming housing by not permitting renters to pay for and occupy the home the amount of money that the homeowner could receive in rent is the imputed rental value of the home a true consumption tax would tax the imputed rental value of the home which could be determined in the same way that valuation occurs for property tax purposes but not the increase in the asset value the home andrews proposes to ignore this method of taxing imputed rental values because of its complexity in the united states home ownership is subsidized by the federal government by permitting limited deductions for mortgage interest expense and capital gains therefore treating renters and homeowners identically under such a consumption tax may not be feasible there this issue would not arise under an expenditure tax since all withdrawals of funds from a pre tax investment account are treated as taxable consumption whether these funds are used to pay rent buy a house or pay down mortgage principal a person may buy a house within a pre tax account but would not be allowed to live there also a consumption tax could utilize progressive rates in order to maintain fairness more consumption means disproportionately more tax liability economic impact edit the temporal neutrality of a consumption tax however is that consumption itself is taxed so it is irrelevant what good or service is being consumed in terms of allocation of resources the only possible effect on neutrality is between consumption and savings taxing only consumption should in theory cause an increase in savings 7 many economists and tax experts favor consumption taxes over income taxes for economic growth 30 31 32 depending on implementation such as treatment of depreciation and circumstances income taxes either favor or disfavor investment on the whole the american system is thought to disfavor investment 7 by not disfavoring investment a cons...