2 thoughts on “Why raising VAT destroys wealth”

  1. Posted 05/01/2011 at 14:05 | Permalink

    What percentage of VAT is sent on to Brussels?

  2. Posted 25/11/2011 at 09:05 | Permalink

    I agree that in the context of European fiscal crisis today’s rise in VAT may be a necessary evil. Moreover, I disagree that indirect taxes such as VAT are less harmful.
    According to S. Strogatz theory of social networks VAT should menace the weak ties (which are the cement of economical society) between economical operators/agents preventing mutually beneficial exchanges from taking place. Also economical hubs could be menaced. For example, Italian government raised VAT to 21%. Here the problem: why not considering the theory of social network of Strogatz as mathematical reason against this provision? The theory forecasts that an attack (fiscal in this case) against the hubs (enterprises and businessman) of a social network (economy network) can make the network collapse.

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