What is the difference between zero rating and exempting a good in the VAT? Q.What is the difference between zero rating and exempting a good in the VAT? A.For a “zero-rated good,” the government doesn’t tax its sale, but allows credits for the value-added tax (VAT) paid on inputs. If a good or business is “exempt,” the government doesn’t tax the sale of the good, but producers cannot claim a credit for the VAT they pay on inputs to produce it. Read more about What is the difference between zero rating and exempting a good in the VAT?
Who would bear the burden of a VAT? Q.Who would bear the burden of a VAT? A.A VAT is a tax on consumption. Because poorer households spend a larger proportion of their income, a VAT is regressive if measured relative to current income and if it is introduced without other policy adjustments. A VAT is less regressive if measured relative to lifetime income. Read more about Who would bear the burden of a VAT?
What are the major federal excise taxes, and how much money do they raise? Q.What are the major federal excise taxes, and how much money do they raise? A.Federal excise tax revenues—mostly collected from sales of motor fuel, airline tickets, tobacco, alcohol, and health-related goods and services—totaled $98.3 billion in fiscal year 2015, or 3 percent of federal tax receipts. Read more about What are the major federal excise taxes, and how much money do they raise?
