You are viewing a single comment's thread from:

RE: Maximizing Taxation Doesn't Maximize Tax Revenue

in #taxation7 years ago

When VAT was raised to 21% from 19% in The Netherlands, total VAT revenue went down; people bought less stuff than expected. It also placed an unfair burden on the lower incomes. It's silly economic thinking that leads to this sort of tax hikes. You would expect them to reduce the tax again after this failure, but that is not an option, it seems.

I'm not so sure about companies leaving because of taxation. Company tax is very low in The Netherlands, and Deals Can Be Made, but all that achieved is that production is still outsourced to abroad, and only a shell of the company remains in The Netherlands.

You can, of course, force a company abroad through taxation, but that is not what I see happening in The Netherlands at the moment, just the usual split between geographic locations of production and consumption that, I think, will lead to no good.