Quote:
Originally Posted by PeteMoss
At least in Europe - they have high VAT rates (25% in Sweden) but not much lower (or higher) income tax rates.
What country follows your model?
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Not many. Monaco has no income tax and high VAT, but they're so small/wealthy they aren't a good comparable.
Some other countries (Bulgaria, Uruguay) have a tax system where the rates for VAT are much higher than Canada and income tax are much lower than Canada. Hungary has VAT of 27% against income tax of 15%.
I don't think "nobody else is doing it that way" is necessarily a good argument though, especially if that's the primary/only argument.
To be clear, VAT without credits is very regressive, which is why I think the Canadian system (exemptions on basic necessities + refundable credits) is quite a good one.