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Value Added Tax

In: Business and Management

Submitted By stangeo
Words 513
Pages 3
In the United States, “individual income taxes and payroll taxes now account for four out of every five federal revenue dollars. Corporate income taxes contribute another 12 percent. Excise taxes, estate and gift taxes, customs duties, and miscellaneous receipts (earnings of the Federal Reserve System and various fees and charges) make up the balance. Similarily, the “UK tax revenues come from a variety of sources. The main sources of tax revenue include: 1. Income Tax, 2. National Insurance, 3. VAT, 4. Corporation tax, 5. Council Tax (local government), 6. Business rates, 7. Excise duties (alcohol, cigarettes), 8. Other taxes include (stamp duty, carbon tax, airport tax, inheritance tax, capital gains) (Williams, R, 2009).” “The systems are most obviously similar in that they rely on income and payroll (social social security) taxes for the bulk of their revenue. But many features of the British system differ significantly from that of the US. For example, the personal income tax is based on individual rather than family income, and only about 10 per cent of taxpayers have been required to file returns in recent years. Capital gains are indexed for inflation, while deductions for mortgage interest and other items are much more limited than in the US. In general, relative to its American counterpart, the British income tax emphasizes simplicity, downplays the role of social policy and limits attempts to obtain finely tuned measures of income (Gale, W., 1997). “About 150 countries have a [Value Added Tax] VAT. It comes in different shapes and sizes, ranging from 5 percent in Japan to 25 percent in Sweden. It's easy to see why it's popular: As a broad-based tax that's easy to collect and hard to see, a VAT can rake in a lot of money. Unlike state sales taxes, the VAT is buried in the price of the good, not assessed at the cash register. Even if a…...

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