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Clueless Trump's Commerce Codpiece: VATs somehow are the same as Tariffs (no, they aren't) [1]

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Date: 2025-02-16

Donald J. Bamboozle tries to pull another fast one on the US public. Like his adult diapers, Trump is FULL OF SHIT ….SAD!!! Tariff messaging becomes an inflationary shell game that rationalizes responsibility for shitty economic policy. By drawing attention away from his first term tariff failures, Trump is taking advantage of poorly configured US tax policy. OTOH, the rich will get richer.

This is like saying that Donald resembles Donald Jr, except one is a bigger loser. On the one hand, one has nuclear weapons and just threw Ukraine under the bus. On the other, one dumped a girlfriend not with furniture gifts but with an ambassadorship at a NATO trading partner.

The Trump administration appears to be moving in a “reciprocal” policy direction despite the significant negative economic consequences for American consumers of across-the-board tariffs on goods coming into the US. However, the EU’s VAT system should not be used as a justification for retaliatory tariffs. taxfoundation.org/...

many nations implement VATs as regular tax practices, not as protective measures.

Gemini on the difference between VAT and tariffs The key difference between VAT (Value Added Tax) and tariffs lies in how and where they are applied: VAT: Type of tax: Consumption tax levied on the value added at each stage of production and distribution of goods or services.

Application: Applies to both domestic and imported goods and services.

Collection: Collected at each stage of the supply chain, with businesses able to reclaim VAT paid on their inputs.

Purpose: Generates revenue for the government and ensures fair taxation across the economy. Tariffs: Type of tax: Tax imposed on imported goods.

Application: Applies only to goods crossing international borders.

Collection: Collected by customs authorities at the time of import.

Purpose: Protects domestic industries by making imported goods more expensive, generates revenue for the government, and can be used as a tool in trade negotiations. Here's a table summarizing the key differences: Feature VAT Tariffs Type of tax Consumption tax Import tax Application Domestic and imported goods/services Imported goods only Collection Each stage of supply chain At the time of import Purpose Revenue generation, fair taxation Protect domestic industries, revenue generation, trade negotiations In simpler terms: Imagine you're buying a t-shirt. VAT is like a sales tax that's added to the price of the t-shirt, whether it's made locally or imported. A tariff is a tax that's only added to the price of the t-shirt if it's imported from another country. Important points to remember: VAT is a broad-based tax that affects a wide range of goods and services, while tariffs are specifically targeted at imported goods.

VAT is generally considered a neutral tax for businesses, as they can reclaim the VAT paid on their inputs. Tariffs, on the other hand, can increase costs for businesses that rely on imported materials or components.

Tariffs can have a significant impact on international trade, as they can make imported goods less competitive. 1 VAT, while it can affect prices, is generally considered to have a less direct impact on trade.

x The farcical "reciprocal tariff" memo Trump signed today explicitly promises tariffs in retaliation for a value-added-tax (VATs), which notably aren't a tariff/trade barrier It gives a pretext to "retaliate" against almost any country on earth—basically all of them have VATs



[image or embed] — Joey Politano🏳️‍🌈 (@josephpolitano.bsky.social) February 13, 2025 at 5:02 PM

US sales taxes are typically destination-based, meaning that the tax is owed where the product is received or consumed. If a European resident orders from a US retailer, they do not pay US sales tax, just like a US consumer can obtain a VAT rebate on purchases of European products. Neither is a subsidy. These are simply consumption taxes falling on the consumer. In practice, however, US sales taxes diverge sharply from the ideal. More than 40 percent of US sales tax revenue comes from intermediate transactions, which impose costs on US producers. This design flaw is not present in VATs, which do not double-tax intermediate transactions. Consequently, the sales tax imposes a penalty on domestic production that a VAT (or a better designed sales tax) would not. European VATs aren’t subsidizing anything—US states are just shooting themselves in the foot. Crucially, this is true in domestic as well as international sales. If a state’s sales tax only applied to final consumption, it would never put in-state businesses at a disadvantage against rivals in other states, because consumers elsewhere are subject to their own state’s sales tax. A Maryland resident pays 6 percent sales tax on whatever she orders (that’s subject to Maryland’s sales tax), regardless of whether she buys from a retailer in Maryland, or Delaware (with no sales tax), or Louisiana (with an average rate north of 10 percent). But when Maryland taxes business inputs, that imposes a cost on Maryland businesses that could be mitigated if businesses operated in lower-tax states or in states which include fewer inputs in their tax base. The disadvantages created by the sales tax, therefore, aren’t unique to goods exported abroad. They aren’t the consequence of trade policy, but of poor tax policy. Europe’s VATs are not tariffs and are not subsidizing European exports. Instead, US states’ poorly-designed sales taxes are harming their own businesses’ competitiveness—whether they’re selling down the street, across state lines, or around the world. taxfoundation.org/...

Trump just dropped a reciprocal trade tariff on all nations equivalent to their VAT rate. So it’s 20% for the UK

x Trump cuts off reporter linking tariffs to inflation. Trump, pointing to his signature:

Well, that’s a good one. Reporter:

Mr. President, you won the White House in part because of high inflation. If your tariffs make prices go up— Trump:

Excuse me. We haven’t asked you to speak yet please. Ok.



[image or embed] — PatriotTakes 🇺🇸 (@patriottakes.bsky.social) February 14, 2025 at 8:58 AM

x Trump threatens other nations with tariffs, and offers to make them go away if they buy some fracked gas. It’s akin to a protection racket. Pay up, or your windows get broken.

www.commondreams.org/opinion/trum...



[image or embed] — conifergirl.bsky.social (@conifergirl.bsky.social) February 16, 2025 at 8:06 AM

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