Tariff is applied to import and export. VAT is applied to everything, including domestically produced things. German cars pay the same VAT which makes it fundamentally different them VAT.
A regular tariff is also paid by the buyer yes, the comment i replied to seems to not understand either concept.
Where the VAT is different is that since all products are taxed the same regardless of origin there is no advantage given to any origin. A tariffs would make the foreign product less attractive. VAT does not.
I already explained why the VAT makes the foreign product less attractive. It's because the foreign product already paid taxes in the country where it was made. So it gets taxed twice, whereas the domestic product is taxed once.
And before you comment, I do understand that the EU allows VAT tax collected in one member country on a product to reduce the amount of VAT tax collected in another member country. There's no such arrangement in place for the US, which is what makes it discriminatory.
Please respond to my actual argument rather than insulting me.
I am unsure what you mean by "the foreign product already paid taxes in the country it was made" in this case. The VAT is done on the buyers side. The foreign product is taxed by the importing entity in the country with the VAT, then by the consumer when they buy the product from the importer.
For the consumer there is no difference between the foreign and domestic product and therefore there can be no difference in how attractive it is.
Because it is single market. Just like inter-state commerce inside USA.
Now why the corporations inside USA have failed to lobby mechanism that allows them to get refunds on sales taxes when they export stuff is reasonable question to ask.
> Because it is single market. Just like inter-state commerce inside USA.
No. The US doesn't do this for interstate commerce. For example, California doesn't reduce its sales tax on an item just because Illinois already charged some other tax on that item.
> Now why the corporations inside USA have failed to lobby mechanism that allows them to get refunds on sales taxes when they export stuff is reasonable question to ask.
It's not the job of US corporations to fix discriminatory tax and tariff schemes cooked up in Europe.
On the other hand, in Washington, some people are starting to take notice. If the Europeans want to slap a 20% price increase on US goods, we also know how to do that for European goods.
You should negotiate with Trump if you think American taxes are too high. Unless EU attacks US militarily and takes their territory, USA taxes are not their issue.
