Researcher: Estonia should lower VAT on food to 5 percent

Absolutely!!! Teras is making a wonderful proposal that is humane as it would have an immediate effect on a broad cross-section of Estonian citizens, especially the underemployed, low wage earners, and pensioners. It is sad to see relatives in Estonia consciously working at buying all the cheapest cuts of meat and canned goods, while finely dressed people next to them have carts filled with the best that money can buy. Hard work at high skill jobs should be rewarded, but, regressive VAT taxes is demeaning and punitive to the 10%+ unemployed and low wage earners. It is a credit to the Germans that reflects their post WW2 change in ethos while still adhering to a strong work ethic. There was a joke going around after the Singing Revolution, "What does an Estonian have for breakfast?" " Another Estonian". answer

'...consciously working at buying all the cheapest cuts of meat and canned goods, while finely dressed people next to them have carts filled with the best that money can buy' That perfectly describes what I saw back in the States when I visited home in Jume. answer

Of course this happens in the USA and other countries...people with higher incomes purchase better quality products while those with smaller incomes often search for discount products.

BUT in most US states sales tax on groceries is lower than sales tax on other goods. Moreover, in many states, there are NO sales tax on groceries. Same goes for prescription drugs. I think the point that Ken is making, is that sales tax on groceries are lower than on other goods, and in many states, there is NO sales tax on groceries. This gives a little greater purchasing power for people with smaller incomes.

http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States

And VAT rates on groceries are also discounted in a number of EU member states, not just Germany. Of course the overlords in Brussels want to eliminate the discount that many member states give for groceries, thus make everyone equal in servitude.

http://digitaljournal.com/article/317120 answer

But in the US, rich people pay lower taxes proportionally than the classes under them. Taxes are fairer here, though I agree that VAT should be lowered on food and medicines. answer

Germany is currently thinking their way out of low VAT on groceries, as lowering income and payroll tax rates is much more efficient for wage growth and lowering unemployment rate.

My opinion, and by simplification:

A single tax rate on everything. Let's say 10%. For everything. Really. answer

I think very often lowering tax is much better booster for economic activity than increasing or even trying to find out some more extra taxes. Nevertheless there should be some control on prices after tax changes. Retailers use to catch small percent too instead of adding all to consumer prices. Not saying whether it´s fair or not but it´s slightly against the idea of reducing tax level. answer

belgium and holland have the same low vat tax. answer

People noramlly pay me for this and you are giving it away! answer