Math & YOU | 2.3 Consumption Taxes

2.3 Consumption Taxes

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Math Help

For the spreadsheet in Example 5(b), be sure you see that the 10% tax at each stage is only for the value-added and not for the new value at that stage.

After all, that is the whole point of a "value-added" tax ― to tax only the value that is added at that stage of production.
Consumer Suggestion

About 150 countries have a value-added tax (VAT), ranging from 5% in Japan to 25% in Sweden. Before traveling to a foreign country, you might want to find out what the VAT is before purchasing goods. You can find a list of VAT by country here.
Checkpoint Solution
1. If the sales tax rate is 8%, then the sales tax is
2. For a value-added tax of 8%, use a spreadsheet.
  
  Notice that in both cases, the total tax is $31.60.
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Jackie (moderator)9 years ago |

Hi John, thanks for providing the link!

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John Bennett 10 years ago |

The link for the list of VAT by country doesn't work anymore. The list can now be found at http://businesstraveldestinations.com/vat-rates-and-refunds-by-country/

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Ron Larson (author)1 decade ago |

I would guess that the main reason that the United States has not embraced a value-added tax is that it increases the number of tax forms that have to be processed.

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