Tossing and Tortured 'Till Dawn

I come back to you now, at the turn of the tide.

Monday, March 06, 2006

Point-of-Sale Taxes and an Increasingly Globalized World:

I buy much of my cycling gear from the United Kingdom. If one is purchasing more than a couple hundred dollars worth of stuff, it's cheaper this way. The WTO and trade agreements of its nature have ensured that there aren't any tariffs or import duties on things like cranks and tyres. Now, if I were in England, I'd have to pay the VAT (Value Added Tax -- a much cooler creation than a sales tax, but annoying nonetheless) on my purchases. It's a percentage of the markup, not a straight figure, but for a pair of tyres that would cost $70, exchanged, in the UK, I have to pay $58, so that's about a 17 per cent reduction. In King County, Washington, the United States of America, sales tax is 9.1%. This is a big difference when we're talking five hundred dollars.

I have a Visa that's Everywhere I Want to Be, so they tell me. I'm upset at a lot of things credit card companies do, but Providian has actually been pretty good to me. This is the kind of situation where one NEEDS a credit card, not to go into debt, but to swiftly make cross-border transactions. It's a lot faster than an international money order, and I get a fairly decent exchange rate, plus a 1 per cent penalty. Even my own bank would charge 3 per cent!

The main point is this: sales taxes are regional, commerce global. You'd think I'd have to pay taxes at BOTH ends when I ordered across juristictions, but somehow "globalization" means that I pay neither.

As an individual consumer, I'm doing the only thing that makes sense.

I'd feel worse about depriving the government of its take if they'd build more roads and schools and less high explosives.


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