Dude, the rolleyes icon means that I was being sarcastic. There is not a significant black market in Europe for consumer goods. One of the things I would do is to make used goods tax free. This would have the effect of creating a new market for people who don't want to pay tax. They could patronize the used or refurbished (only tax on refurbished goods would be on the parts and labor needed to refurbish, not the whole sales price) market. In places where there is a national sales tax, there is not a significant black market because companies have too much to lose if they let their goods go without paying tax. They could still supply low tax items by refurbishing their used equipment, so the incentive to game the system would be even less. There would still be some individuals who would game the system by purchasing and/or stealing their firm's products and selling them, but that black market would be miniscule and would not significantly impact tax receipts.
Geeimsobored- please try to read my response and this book. To understand the central bank is to understand the politics of the world. Every American should and really 'must' read this book. link
dude, i want read minds. what for? if successfully implemented, this will cannibalize the market of new goods, eroding the gov's revenue base which undermines one of the underlying premise of you national consumption tax system. in the over-all scheme of things, to the extent that this would stifle (at least delay) innovation for new products, it would be counter-productive to the national economy au contre. I challenge you to id the nations whose experience supports your claim. Russian is a good eg---black market activities running amok---that contradicts this claim by you.
dude, i don't read minds. the level of black market activities in Europe has been relatively higher the US, an economy more condusive to innovation.
I didn't assume that you do. That is the reason I put the rolleyes in there to clue you in to the sarcasm. No, it will encourage the recycling of goods, encourage manufacturers to produce goods with a longer life, and encourage consumers to purchase goods that are not simply disposable. It will also give the potential black marketeers you are so afraid of a legal way to buy and sell goods without paying taxes on them. Some people will never purchase used goods. These are the "consumers" that the tax would hit. People who have enough money that they wouldn't care about the tax would, by and large, not be looking for ways to avoid it. They would simply plunk down their money like they do in Europe. Actually, it would encourage companies to actually improve their products significantly because in order to get the consumer to pay the tax, they would have to provide some kind of major benefit. First off, it is au contraire. Russia is not even remotely close to analagous. They have not had the "rule of law" since the wall (and government) fell in the '90s. Of course black market operations are going to rule when you don't have a government that can enforce laws. As for your request for a list of countries in which national sales taxes have not created massive black markets... Japan Norway Canada Australia New Zealand Singapore France Denmark Sweden These older, established economies and governments are far more representative of societies where the "rule of law" is in effect and as such, are a much better comparison to the US than Russia.
au contre, the companies don't give a rat's ass about tax; the tax paid gon't go into their pocket. The inherent major benefit the company offer is that it's new, not second hand. i give you japan and France; the others are insignificant. for every Japan and France, you have Italy, Germany and the UK where black market activities have been problematic, such that there a seeming tacit approval
Again, it is au contraire. You said that companies would have no reason to innovate if there was a consumption tax. I said that they would have to build more value into their products (through innovation) in order to get people to be OK with paying the tax. And this is your response? You might try making your point again, because this did not make a lick of sense given what we were discussing. Really? On the list of countries by GDP, Canada is number 8, Australia number 15, Sweden number 20, Norway number 25, and Denmark number 27 out of 180 listed countries. None of those are "insignificant." Evidence, quote, anything? A search for 'Germany "black market"' on Google brought up references to post WWII Germany, but nothing contemporary. A similar search using Italy brought up information about a potential black market area in Naples, but something like that would require the government looking the other way, which we would never do in the scenario I am describing. The same search for the UK brought up listings about Baghdad's black market organ trade and black market bombs, not exactly indicative of a thriving retail black market.
