Browse the Topics, Table of Contents, and Index
Follow us:
Twitter Facebook

2.3 Consumption Taxes

2.3 Consumption Taxes
  • 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.

  • Comments (3)

    These comments are not screened before publication. Constructive debate about the information on this page is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate copyright. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.
    When posting a comment, you agree to our Terms of Use.

                _____     _____     ______            
      ____     |  ___||  /  ___||  /_   _//   ____    
     |    \\   | ||__   | // __     -| ||-   |    \\  
     | [] ||   | ||__   | \\_\ ||   _| ||_   | [] ||  
     |  __//   |_____||  \____//   /_____//  |  __//  
     |_|`-`    `-----`    `---`    `-----`   |_|`-`   
     `-`                                     `-`      
    Showing 3 comments
    Subscribe by RSS
    system user
    Jackie (moderator)4 years ago |
    Hi John, thanks for providing the link!
    system user
    John Bennett   4 years ago |
    The link for the list of VAT by country doesn't work anymore. The list can now be found at
    system user
    Ron Larson (author)8 years 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.
©Larson Texts, Inc. All Rights Reserved.