Taxes on revenue create strong incentives for vertical integration and consolida... | Hacker News

Hacker Newsnew | past | comments | ask | show | jobs | submit

		sokoloff on June 5, 2021 \| parent \| context \| favorite \| on: G7: Rich nations back deal to tax multinationals Taxes on revenue create strong incentives for vertical integration and consolidation (because there are fewer links in the chain to be taxed). If one entity owns the farm, the food distribution, and the grocery store, they have one revenue transaction to be taxed. A small farmer selling their eggs to a distributor who sells them to the grocer who sells them to you is taxed three times on what amounts to same activity.

kaveh_h on June 5, 2021 [–]

This is perhaps true of revenue tax. But for VAT You can deduct VAT of sales from VAT of purchases.

sokoloff on June 5, 2021 | [–]

Indeed. Which is why VAT is a much better and more common structure of taxation than a tax on all revenue.

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact