Sales Tax VS VAT | British VS American Evan Edinger & Luke Cutforth

[@evan]

Ya boy's got a spon deal! Get 70% off NordVPN! nordvpn.com/evan Use codeword: evan Hope you've been enjoying the more educational stuff! :D

[@yasminsalih5119]

Evan Edinger loving the educational stuff when it’s made fun like these. Also love U.K. vs US series

[@owenfautley]

I remember the female sanitary products argument on Russell Howard and he said that crocodile meat and helicopters are not taxed also please talk about what taxes are used for in the UK and the USA

[@poppynel6917]

Hey Evan great vid xx 😙

[@kayceeb13]

Got my 3 year subscription to NordVPN, thanks for the discount hookup!

[@aobrien4]

Evan, National Insurance isn't the only source of financial contribution to the NHS or the State Pension.. All taxes are combined into a central pot then redistributed. (not stating the obvious)

[@rachjade8785]

I see how VAT can be seen as taxing the poor but, as a Brit, I’ve never thought about VAT because we don’t have to add it on. The price you see is the price and I think it just makes way more sense to do it that way.

[@winnywin]

I'd rather VAT and every other tax was abolished. Increase income tax appropriately. A truly progressive tax. The more you earn - the more you pay.

[@AbsoluteTVYT]

It still shocks me that something that cost 99 cents in the US also has to have sales tax added on, whereas you can get the same thing over here for 99p, tax included. Surely the companies must earn less in the UK, right? I'm sure the exchange rate plays a decent part in it but a cheeseburger from Maccies costs around $1.10 in the US and 99p here.

[@ahuman487]

Reasoning is poorer households have a higher marginal propensity to consume so they pay more vat then the wealthy. In general food in the uk is cheaper than many other countries.

[@johnbartholf777]

Even with sales tax sometimes added, food is less expensive in the U.S. than in the U.K. Hiding the tax doesn't mean you don't pay it. It means the gov't is hiding it from you so you don't realise just how much you pay. And it's a LOT.

[@AbsoluteTVYT]

@@johnbartholf777 A cheeseburger from a popular fast food restaurant in the US costs 99¢ plus sales tax (probably around $1.10). The same in the UK is $1.27. The consumer pays more, but the company earns less.

[@iLoveOneDirection164]

Fun fact: the reason Greggs don’t have microwaves is because they would have to heat up the food which would mean they would have to pay VAT. They argued that the food is baked in store and just happens to be hot, and because it isn’t kept hot in anyway they don’t pay VAT. So they just continuously make new batches of sausage rolls etc so they are hot when you order without using a heated cabinet or microwave

[@wolflordandy]

They use to keep them warm after baking and that was fine, but when the pastry tax came in in 2012 they did this to sidestep it again.

[@evan]

Wow!

[@aonghusmcboaby8289]

There is nothing you can get in Greggs that isn't better cold

[@debbielough7754]

@@aonghusmcboaby8289 You think cheese toasties are better cold?

[@aonghusmcboaby8289]

@@debbielough7754 why would ye get a toastie fae Greggs

[@suckers0]

Anyone remember the great 'Jaffa cake' debate from the 90s? In brief, cakes and biscuits are nil rated for VAT, unless they're a biscuit covered in chocolate (Jaffa Cakes are covered in chocolate). A chocolate covering makes them a luxury you see. HM Taxman said Jaffa cakes were biscuits; McVities, the manufacturer, said no, they're cakes. McVities won in a court trial. I think the case turned on whether or not the Jaffa cake went hard or soft when stale - a biscuit goes soft, a cake goes hard.

[@marksmithwas12]

That's really fascinating. I just wish they wouldn't go stale and crunchy so damn fast after opening a new packet, but hey, if it means I get to see them on offer for 90p at Tesco because they're nil taxed, it's a price worth paying!

[@zoebenefer6149]

Marksmithwas12 do you not eat the whole packet at once?

[@marksmithwas12]

@@zoebenefer6149 I try to resist so I can have more later, but 4 out of 5 times I cannot resist 🙃

[@pillinjer]

McVities went to court because of VAT. Because they won, they get the VAT back for anything they buy, but don’t charge VAT on Jaffa Cakes meaning more profit for a lower price.

[@CED99]

Yes chocolate biscuits are a luxury item, as they are an option above and beyond mere biscuits, and HMRC wanted to tax Jaffa Cakes as a Luxury good as they too were covered in chocolate. You are correct suckers01 - because Jaffa Cakes go hard when stale the HMRC didn't get the luxury tax

[@colecerys123]

Im from the UK and I remember it being so annoying shopping in America and when you pay its not what the price says because of the tax!

[@notdead6479]

Went to a everything is $5 store. Which it wasn't because they hit u with the tac at the till 😢😓

[@waycoolscootaloo]

It's done this way in the US and Canada for that matter, because Sales Tax is a more transparent tax. The consumer knows exactly how much their being taxed and on exactly what. VAT isn't as transparent.

[@Tarka98]

@@waycoolscootaloo yes it is, the VAT is explained on your receipt.

[@waycoolscootaloo]

@@Tarka98 VAT is a hidden tax that sucks a huge amount of money. Americans want to see their taxes in a transparent fashion. This is why taxes on phone bills, concert tickets, gas pumps, Walmart purchases, etc... are always listed as separate line items. Another reason is that, like all consumption based taxes, it is regressive. Since poorer people use more of their income on consumption, they will pay a higher portion of their income in a VAT environment. Because it is hidden, it is easily raised and the citizen doesn't know if the price of a good went up because of the true economic pricing dynamics or the tax. Every time a product changes hands along the process, the government takes out some of the “value” which also adds to the final price of the item. The consumer may see the final VAT added to their purchase, but how much tax was paid, and subsequently added during the manufacturing process?

[@MsPinkwolf]

@@waycoolscootaloo VAT doesn't 'just go up'. It happens very rarely and is always well publicised in advance.

[@outside8312]

Evan: Wants to to talk about how cool it is you pay what's on the price tag Luke: Gives a wholearse economics lecture

[@MaxWolfe17]

I'm Evan...and I'm british

[@robertgronewold3326]

I live right on the border of Iowa, Wisconsin and Minnesota, and each state has drastically different tax sales tax systems. Iowa has a fairly balanced tax, with no taxes on food, Minnesota is completely taxless (because they are very heavy on tourism) while Wisconsin has a sales tax on food, but a lower tax on clothing. So I'll often cross the border to Wisconsin to buy clothing, but I'll buy food here in Iowa. I never shop in Minnesota because there are no real shopping areas in an easy access to my location.

[@letitiakearney2423]

Robert Gronewold How does buying things online like Amazon and do you still have to pay different taxes?

[@bones7065]

@@letitiakearney2423 yes, you do have to pay tax based on the billing address you select on Amazon

[@waycoolscootaloo]

Actually I live here in Wisconsin and food is tax free at grocery stores. Only snack items are taxed such as candy and soda. But regular food isn't taxed at all. For example I just went to the store and bought $40.00 in groceries at Meijers and the tax charged was 0%.

[@AJ-cg3jb]

I live in Minnesota, we aren't completely taxless? I don't know where you got that from?

[@AJ-cg3jb]

There is no tax on food (excluding food with little or no nutritional value) or clothing but there is tax on everything else. It's 8.8% in the city I live in

[@Firenzell01]

I agree with Luke that it shouldn't feel like you're paying tax, that's why I really like PAYE (Pay as you earn) and tax already being added on the price

[@yikes.3239]

Emily Burden yes! i think when people feel like they're paying tax they also grow to resent tax more as well which only harms the social security system

[@aamackie]

Which is why they can set it quite high and everyone just blames the shopkeeper.

[@_Piers_]

I worked freelance for several years and then went back to working directly for a company for a while...that's when you hate PAYE. Once you've seen home much tax you can avoid paying when you're self employed/own a business, you'll be annoyed by it forever. It wasn't that I was having to pay the tax, it was that everyone should have to and it shouldn't be so ridiculously easy not to. Ridiculous things, like if you were out of your home for work for over a certain amount of hours you could claim back the cost of your meals against your tax....I guess if you work a regular job, you don't need food! :)

[@mofo888]

Idk, I LIKE to think about about the fact the govt gets a cut of my money. It keeps it in mind that i need to stay engaged to see what my money is up to.

[@Weakeyedominant]

@@_Piers_ exactly! Most people working full time in the UK have no idea how much of their income they hand to the government every year through PAYE and stealth taxes. It is easily be 60% of income if you include council tax, VAT, a student loan and fuel duty.

[@zacharyjr4410]

the brit taught me better than my business teacher

[@gareth-stuartogg7887]

I'd be worried for your business teacher. He explains it in layman's terms but he barely touched the complexities of taxation

[@zacharyjr4410]

@@gareth-stuartogg7887 the brit is talking daily life i can actually use, teacher talking exam questions ya know

[@gareth-stuartogg7887]

I think you misunderstood what layman's terms means

[@coopsnz1]

Vat tax effect how much a business makes in net profit and sales numbers. In USA more sales per capita because there no federal sales tax in USA

[@wolfheart8604]

Also, condoms are free from the NHS but tampons are not, which is super stupid.

[@colonelcider8292]

To be fair condom's benefit both men and women where tampons only benefit women so it makes some sense that condom's are provided while tampons are not. And prevents unplanned child birth. Should tampons be free and provided by the NHS? Honestly, at the moment. In my opinion no, the NHS is currently struggling with funding but if the NHS had the funding then yeah tampons should totally be provided.

[@feothyr6810]

Yeah, it's super weird. Half the population needs that stuff regularly - they didn't decide they need it; they just do, because they're born female and have to deal with enough other shit once that time comes. The least we can do is make sure every woman and girl has access to these essentials, whether they can afford them or not.

[@sarahwardle5556]

Agree with 100%.Although most people do,you don't HAVE to have sex,but 50% of the population between around 12(I know some girls get periods sooner and some women get them for much longer)and 50 NEED sanitary products once every month

[@wolfheart8604]

Colonel Cider Yeah, but as Theo said, females didn’t decide to have to use them. Though I do agree with most of your points here, and I definitely agree that at the moment we can barely afford doctors and nurses, we shouldn’t have to provide free condoms and tampons to people. Yes, I did include condoms in there.

[@colonelcider8292]

@@wolfheart8604 agreed although I don't think people would like it if you suddenly made condom's a luxury item after it was free. xD

[@coast2coast00]

My mom(accountant) always used to say the reason for the extra taxes being visible is so the taxes were always in the open, always being checked. If the taxes are included in the price, it's easier to be taxed secretly or unknowingly. Probably comes from the taxation without representation days.

[@dsego84]

it could still be included on the sticker, so you can immediately see the final price

[@gravyz2cute4u]

Taxes aren't a secret when the national tax rate is the same. Your receipt/invoice will indicate which items include VAT as well as the total VAT paid so nothing is secret. There is literally no issue with a flat rate of 20% being added to all final prices when everyone knows that the tax rate is always the same everywhere in the country.

[@clhound]

It's time for another revolution.

[@lolerie]

It is literally illegal to print not the money you are charged on a debit card. It is called card fraud.

[@Nienke131]

I’m from NL and just because tax is included on the pricetag does not mean it’s “secret”. In fact, it is mandatory to display the tax amount on every receipt, so you can always see how much tax you paid. That is if you want to, cause most people simply don’t care. But if you do, you can just check your receipts ;)

[@Keeleyweeley13]

"We have health care man" lol love it

[@icetea180918]

I work in tax in germany and I found it really interesting. We have the same system as in the UK. I could not imagine it any other way :D.

[@ClaraRenway]

@Michael Evans I mean with VAT some items are taxed differently such as necessities like bread at 0% and tampons at 5% (due to EU law) and most non-necessities at 20%.

[@rachaelevans8351]

@@ClaraRenway tampon tax is now gone

[@lolerie]

Well, cause USA system is illegal in UK.

[@thunders2393]

​@@lolerieIt's not illegal, it's just a different tax system.

[@jayzo]

Evan thought he was keeping money from Pret, turns out he was committing tax evasion.

[@siriuslyorion2975]

"We have healthcare, man. Complain to me when you've got healthcare." _F L E X_

[@mattpen]

Siriusly Orion tbf we do have Medicare and Medicaid and there’s a separate tax paid for them on everyone’s income as well.

[@siriuslyorion2975]

@@mattpen Ye also have something called medical bankruptcy, something that exists nowhere else in the developed world

[@SomeGuy-lw2po]

@@mattpen we pay what we call "national insurance", it goes towards the NHS, and also our state pension, so when we get old, the government also gives us money when we can't work anymore, on top of any private pension

[@paulm2467]

Matt Pennington you pay almost as much for those two poor services as we pay for full coverage for everyone on the NHS, you also pay an average of 9% of your salary on top of that for insurance.

[@celticmad66]

Paul M the fact diabetics are dying in the us because they have to ration their insulin shows the us system isn't working, the NHS is a fantastic system , my son went through a 8 hour spine operation in the uk last year and it cost zero , I dread to think what that would cost in America

[@wakaran7053]

Why are taxes suddenly entertaining

[@Willmorrison99]

Because Bernie and Warren

[@emeraldh80]

I'm enjoying the tax series much more than I thought I would. Great stuff

[@MelAsYouSaidIssa]

Please, pleeeease keep up this financial series you're doing! I'm loving this so much and its everything I should have learnt ages ago but didn't!

[@sailorbychoice1]

7:30 There is a technical term for those who only use the _Rhythm Method_ and _Pulling Out_ as birth control~ Parents.

[@wolfheart8604]

This has honestly helped me so much more than my Teachers.

[@melikeylnzr]

It does not matter that i dont pay taxes yet. It does not matter that im from turkey. You can make even me wanna watch about things that are not necessarily my interests but i always end up learning and using the knowledge later. Keep up the good work evan :)

[@jimmymckinney5496]

VAT can feel like a tax on the poor until you start placing higher VAT on luxury items that the poor can't afford and when you start using VAT to subsidize healthcare or other social welfare programs. So while it may appear that the poor are being taxed a larger percentage of their wealth, they're also receiving a large percentage of their welfare through VAT. This will especially be true when VAT is used to prevent companies like Amazon giving artificially low prices to kill small businesses, and then use that VAT to help implement a universal basic income.

[@medleyshift1325]

A VAT is a regressive tax. (aka) It taxes the poor at a higher percentage of their income than the rich. What I think you are getting at, is that taxes themselves are used to pay for public services, many of which help the poor more than the wealthy. Often in practice a VAT or sales tax balances a progressive income tax, and most systems are in the middle on the whole.

[@ethelmini]

There used to be a luxury rate of VAT, but at its highest it was only 25%. VAT is now about double what was the basic rate. It is regressive, but it is also paid by overseas visitors and others who would otherwise contribute little, like wealthy pensioners who know how to game the tax system.

[@hpenvy1106]

@@medleyshift1325 on the other hand: Poor people tend to buy for example cheaper cars, so the VAT is lower of them compared to expensiv car. Same goes for bigger TVs, more expensiv mobile phones and so on.

[@medleyshift1325]

@@hpenvy1106 Unfortunately in practice someone with twice my salary won't buy a car worth twice mine. This paper shows the effects of the VAT of: Belgium, Greece, Hungary, Ireland, and the UK. Every one is regressive. It's not bad policy, or necessarily cause for concern. It's just the way it is. "How regressive are indirect taxes? A microsimulation analysis for five European countries" Decoster et al.

[@eroticpandaz1524]

Medley Shift really interested in learning more about uk taxation - any noteworthy resources worth looking into? cheers

[@hazelhermioneaos5372]

The only person who can make Taxes and VAT interesting😂💖 love ya Evan and can’t wait to see Luke(and hopefully you) at Vidcon LDn💙

[@evan]

I'm defo not going to Vidcon London

[@hazelhermioneaos5372]

Evan Edinger Nooo😭 Love ya anyways💖😂

[@JoeJoeJoeJoeJoeJoeJoe]

On the subject of tampons, some Premier League football clubs (eg Liverpool, Everton) give out free tampons to fans at matches. The UK government should think more about them being a “luxury”.

[@thedarkness111]

Toilet paper is taxed at 20% tampons only at 5%. Both are essential for you genital health but one you have to use multiple times a day every day so why you only whining about one? VAT is on most items (many of them essential) you're misunderstanding the dichotomy. They're not saying you don't need tampons they're just saying the government needs money. You know to py for when something goes wrong with your vagina or a baby comes out of it. If you want a welfare state stop resenting taxes. Businesses that give away free tampons are doing it as a publicity stunt and frankly when you consider how much football tickets are you'll realise the free £0.10 tampon isn't rally that generous.

[@alganhar1]

Sure, if women were offered menstrual cups on the NHS I would be all for it, but tampons and sanitary towels? Forget it. You know they contain high amounts of non biodegradeable plastic and petroleum derived firbres right? They are incredibly difficult to recycle due to how they need to work and are manufactured, and thousands upon thousands of the damned things get flushed into the river and marine ecosystems every day. menstrual cups on the other hand are reusable, made of silicone rubber they last around 5 years before needing to be replaced, are easy to recycle, and even if not recycled use far less plastic than 5 years supply on tampons and sanitary towels.... Oh.. Soap and shampoo are also not luxuries, they are also extremely important to *everyones* health. By your very argument we should be thinking about supplying THEM on the NHS as well....

[@Wonderland2097]

Here is a few items that are considered more essential than tampons, Helicopters, edible sugar flowers, bingo, toffee apples, exotic meat, gambling.. & yet you’re seriously saying that tampons should remain the luxury taxed item. o.o Also I agree toilet roll shouldn’t be taxed as a luxury neither though at least you can get toilet roll in public restrooms for free unlike sanitary products.

[@shawrobert10]

Its actually european laws that make sanitary products taxable, if Brexit happens the UK could then remove this atrocious tax.

[@Wonderland2097]

Uncle_Of_ Four The European Commission says it is aiming to bring in a zero rate for sanitary products and the UK government has already legislated to allow this to happen as soon as rules change. So regardless of brexit it should happen either way though ofc this is gonna be a wait & see situation for which ever side you live on.

[@ConnorDurie]

I've watched a LOT of these videos from Evan and I'm yet to find one where the US comes across as the better system.

[@logostic123]

Connor Durie Never. The answer is never. Jk it’s seldom. Born in NY and raised in Florida and I can attest to this personally lol I’ve got an 800 dollar ambulance bill floating around and that’s a cheap one.

[@TheVortexGaming]

It really comes down to this, you have to think of the United States as like an EU not a UK because states can have so many differences they can practically be different countries and to compare how things are standardized across 330 million people and 50 states as opposed to an island with 66 million people is not a fair comparison. If he did these videos on [Any State] vs UK it would make more sense and maybe he would win a few of these

[@nadiar.4638]

@@TheVortexGaming maybe a few, but not that many 😅

[@camthesaxman3387]

@Vortex Not really. The UK is a collection of countries (England, Wales, Scotland, Northern Ireland), and those are comparable to the individual states. I've traveled all over the USA, and culture, business, and the way things are done are very homogenous across the nation, with very few exceptions.

[@jitenhkm]

Hey Evan and Luke love this miniseries on tax. Luke the story you are after is the cake v biscuit scenario. Mcvities were claiming VAT exemption due to the Jaffa cake being a cake and not a biscuit. It is a fascinating case to read as they were taken to court to prove that it was a vatable product and Won!

[@voidedcode2454]

I really love watching these videos as I live in Australia and am constantly comparing both countries to my countries systems. In Australia we have the GST (goods services tax) which is a 10% tax put onto all goods and services (with some exemptions) that just like the UK is included in all prices. At the end you started talking about national insurance payed by employers that assists employees in retirement. We have something similar. It is called superannuation for us, it is essentially an extra 10% on your income that employers have to pay into a fund that you don't have access to until you are 65, I think. This means that from the time you start working you are starting to build up your retirement fund without even having to think about it. However I do not know if this is taxed. Wall of text finished

[@emilycross5972]

No none: British people: tea cakes are essential

[@laurenallison6942]

As a VAT officer, this annoyed me because bread is zero rated..

[@em-or7qc]

I was thinking that. I was also thinking what bread do you buy that's 2 quid! I get Tesco's bread for 69p lol

[@randomstuff9005]

@@em-or7qc 69p NOICE!

[@mudamalik]

@@randomstuff9005 69p = pissing in 69 position?

[@randomstuff9005]

@@mudamalik no Have you heard of the u.k or do you piss your self so often that you needed to piss in the comment section as well?

[@em-or7qc]

@@mudamalik eh? 69 pence! u know- pennies? money? u weirdo!!

[@ailis2635]

Omg I am living for these nerdy tax videos tbh

[@lynnhamps7183]

Who knew taxes could be so interesting..genuinely enjoyed this. Evan on top form is always a delight ('my friend with the same name' lol) ......By the way council tax here in the UK pays for all Local services such as planning, transport, highways, police, fire service, libraries, leisure and recreation, rubbish collection and disposal, environmental health and trading standards. Therefore it isn't means tested because everyone has equal access to these things, whether you rent or own. So in effect, it pays for the upkeep of the infrastructure, the roads, streetlighting, hedge cutting etc, local swimming baths and gyms, also buses...London is a lot dearer partly because of the extra facilities available and is based on house prices because it seemed the fairer way of doing it (controversial :) ) as higher property prices tend to be in the same area as better facilities....There is no VAT on doctors/medical services, childrens clothes or shoes (even if you wear them as an adult), books, magazines, Post Office services such as stamps, charity shop items, most food but not luxury goods, also if you are disabled or have a long term illness you can register as VAT exempt..NI pays for the NHS, the State Pension, unemployment benefits, sickness and disability allowances....All in all it's a pretty fair system, everything is transparent, you are told every year how much you paid and where that money went and is generally pretty good value ..the NHS alone is, in my opinion, worth all the taxes we pay (and of course, if you are under 18, disabled, unemployed or a pensioner you don'y pay anything.)

[@alexwright4930]

In a lot of local authority areas, esp large cities where there have been years of cuts to central government funding, council tax doesn't remotely cover local services apparently.

[@johnlabus7359]

Taxes aren't levied just at the state level. They can also be added a local community level, perhaps by county and then by municipality. In the USA, there's various taxes that are levied at the federal level, state level and local level. Each state controls its own tax structure, and many communities do the same. Because there's such a wide variation in sales taxes leveled across the country, it's practically impossible to include them in the price of an item, and market them across the country.

[@cameronx7923]

Dude I've been waiting for this all day

[@evan]

Well it's EARLY! :D

[@saff1257]

teacakes= no VAT, you need this tampons= VAT, you don’t need cleanliness

[@alfie6683]

bri’ain

[@ellis-7178]

The one dislike is the other Luke Cutforth

[@enemixius]

In Sweden, the standard VAT is 25%, but certain products and services have 12% or 6%. And when it comes to advertising prices, the exception is B2B. If you sell to businesses, you can advertise prices without VAT. That's why some webshops will ask you if you're shopping as a consumer or a business.

[@LittleEmm1979]

I've never really been interested in tax but these videos were interesting and informative. Thanks.

[@becky8466]

This video is such perfect timing! I’m an English teacher in Japan where the consumer tax has just risen from 8% to 10% (with some exceptions). So many of my students have been asking me about UK consumer tax in the last week, so now I can finally give them answers.

[@izubeirw]

“WE HAVE HEALTHCARE MAN” I have passed out

[@Duessa2000]

In Canada there is a provincial and federal sales tax... some provinces charge them separately and there are different rules for each. Where I live the tax was put together and is called HST (harmonized sales tax). To my memory the only items with tax exemption are children’s clothing, diapers, feminine hygiene products and unprepared food (basically fresh dairy, veg, meat etc). Best way I’ve found to explain the food exemption is... if I buy a salad I pay tax, if I buy lettuce, tomatoes, cucumbers etc... I don’t.

[@BenevolentWorm]

Why when someone mentions the tampon tax do men mention condoms? There's no similarities.

[@Robert-cu9bm]

Rachel W Men can have periods too now.

[@sherrygg6551]

@@Robert-cu9bm they cant

[@MeAMoose]

1 year late but the general gist is that they are both sex-orientated products. Is it right to compare them? Probably not but eh.

[@queeng508]

honestly these videos on taxes and other stuff on finances is so so interesting. i personally dont live nor in the usa or the uk, but i love seeing this kind of things explained. i think it would be pretty interesting to compare these way of paying with those from the other english speaking countries, but also comparisons btw uk and eu (in general but a specific country too), and also the avarage or like basic differencs between continents, not necessarily specific countries. another cool thing i think would be a comparison of the finances based on cases (study cases, meaning practical complete examples) but idk

[@TELBOYO10]

VAT is not applied to food,books, children's clothing etc.

[@spencerwilton5831]

Terry Dickinson Most foods are indeed exempt. However "luxury" foods have VAT added, ice cream for example is considered a luxury. In practice, it goes unnoticed by the consumer as it is always included in the ticket price when payable.

[@philiplublin8106]

we in Denmark have a VAT at 25 % on most stuff. but like the UK its hidden the final price. its a great system for the company as well as the government, as Luke explained. our other takes are 42% income, 8%workforce, and some for culture stuff. so in effect i pay around 50% but in return i got work insurance when i was unemployed. i got a free education, i get free healthcare and a pension. the fact that i have to pay more for an end product seems fair when you know its going to benefit everybody. is all that perfect, no but we are talking about small adjustment.

[@solitairez3719]

i’m british and did not know about most of the things Luke was saying 💀

[@poppynel6917]

Really

[@marksmithwas12]

Same

[@jasminejackson3485]

same!

[@sempha4123]

Then you're either under 25, or completely oblivious. You encounter almost everything he mentioned pretty quickly once you're living alone.

[@josephmanion3192]

@@sempha4123 people really should come across this before haha it literally tells you on most recpeits the amount of tax you're paying haha

[@terryhayward7905]

When VAT first started, prices in some shops were marked as £10+VAT or in others £11.25 inc VAT. ( VAT was 12.5% then ) It gradually changed to everyone adding VAT and marking that as the final cost.

[@GG-kp4gy]

Taxes only ever go up. 20% now I think.

[@jasminejackson3485]

i learnt more about taxes in a 15 minute video than i ever did at school

[@Chelle23464]

The eat in or take out question affected taxes in the US at least in Virginia for awhile. Eating in was a higher tax. Now any prepared food is taxed higher. In VA we too have essential items and are exempt or taxed lower like food, clothing, and medicine. We also set up a weekend every August for tax free school supplies.

[@cassieosbourne7666]

“We have healthcare, man” 😂😂😂

[@rvanzo925]

Me too, with no wait time and I can see whatever doctor I want whenever I want. All covered by private health insurance.

[@cassieosbourne7666]

R Vanzo free though

[@mlgprussian7115]

Less taxes and no wait time or high taxes and making doctor visits whole day things?

[@MrSandwich246]

MLG Prussian but private insurance is more expensive and bankruptcy due to medical service in us exists so...

[@mlgprussian7115]

leo ezeoke If you have bad insurance. I had to get my ACL fixed a couple years ago and it cost me $2250 out of pocket.

[@TheShlongman]

Council tax is closest to property taxes in the US. The biggest issue is that it’s based on house prices from 1992 so is a pretty broken system. National insurance just goes into the same pot as all taxes so isn’t ring-fenced like most people think.

[@thefountainpendesk]

I thought they asked if youre eating in or taking out so they put it in boxes or on a tray

[@briwanderz]

might be both.. because they ask that here in the US as well, and the tax is the same either way.

[@Kelsie154]

It is, but it's also so they can tax you for eating in. Mostly the tax is just to cover the drink refills though.

[@freyamurphy3860]

As a British uni student who’s just becoming an adult who has to pay things like council tax, this video and the one on income tax have actually been really really helpful. We never get taught these things in school. I had to rely on my parents saying “oh yeah now you have to pay all this sorts of stuff” without really explaining why.

[@thedarkness111]

I'm not sure you should be at uni if you need the concept of taxation explaining to you. Fyi full time students are exempt from council tax so they obviously didn't explain it very well.

[@freyamurphy3860]

thedarkness111 Please don’t go around being unnecessarily rude to strangers who are leaving a nice supportive message on a video. Nobody ever explains it to you (and it doesn’t get taught in schools) until you need to start paying for it, and then you have to go and look it up for yourself. So it’s nice for it to be explained in an interesting and easy to understand way. I know that university students don’t have to pay council tax, but at one point I nearly did have to, so I looked it up and yes they explained it to me. They explained everything well.

[@bcase5328]

I think all youth need organized class in this kind of information, personal finance, budgeting, banking, daily tasks, steps in renting/purchasing a house, insurance, documents you will need to store, keep your own log of (cover yourself in employment setting), etc. at about the same time as they can start employment.

[@jessie6243]

Evan: Lived near Delaware, enjoyed traveling for tax free shopping Me: lives near tax free New Hampshire, does the exact same thing!

[@kohl1722]

Saaaame, my parents would always just go to the nashua in NH, instead of Massachusetts. Also, cigarette prices have an insane difference from state to state. My dad wasn't allowed to buy smokes in his state, he had to go to New Hampshire where he could get a long ass pack for half the price of a way smaller pack

[@jessie6243]

Kohl OMG my dad would always go to NH and come back with those cigarette packs too! :D

[@jimzecca3961]

Yeah we grew up near Philly and did a bunch of shopping in the Wilmington area, including Christiana mall, when visiting my relatives there.

[@darigaabikenova8724]

Thank you for incredibly important topic I will probs never understand even in native language. I feel like your channel is dedicated to themes no one is teaching us

[@asmasaeed7809]

I’m very confused and I do GCSE Business Studies

[@NathanAlderGigaBITNate]

Asma Saeed wait to A-levels

[@brahnseer3512]

I am not surprised. They left out the fundamentals that vat is a charge on goods and services and food and some clothing are exempt. Also companies have to be registered to charge vat and this depends on their turnover. So small companies may therefore not charge vat: therefor if for example you employ a decorator who is not registered for vat their charge will be considerably less than a registered company. It is the ultimate consumer who pays the tax and therefore registered companies reclaims any vat they had paid for the raw material from which they made the product which was sold to the ultimate consumer. And yes, it is a tax on the poorest members of the population because the amount paid is the same whether bought by the rich or the poor.

[@asmasaeed7809]

Nathan Alder OH HELL NO

[@khaxjc1]

I loved getting all the more detailed information! Thank you.

[@clabood]

In Australia we have Goods and Service Tax (GST) at 10%. The GST is added to the final price of the goods or services. In NZ it is 15% GST. We have local or council rates this is paid once a year. If you are renting the landlord pays the council rates from you the rent you pay.

[@coopsnz1]

High excise taxes in Australia why building supplies expensive to build homes

[@senorbaconhawk11]

It gets even more confusing in states where there isn’t a statewide sales tax. In Wyoming, where I’m from, some counties have 6% sales tax and others have 5% or even more. But we have no sales tax on food throughout the whole state and no state income tax. edit: I wrote this before finishing the video, but Evan is entirely right. Property taxes are generally higher in WY.

[@lolerie]

And a would be card fraud and false adevertisements in UK, EU, and certainly in Russia to not give final price.

[@job996]

Love this video. I'm a UK tax advisor so this video fulfilled the tax nerd in me 😜 National Insurance was introduced with the intent to fund the NHS and for many years the money collected from it was ring-fenced to do just that. However, some time in history that, quietly, stopped and the money collected from National Insurance just makes up part of the tax pot the government then uses to, ya know, run the country. The reason they didn't announce it or anything is because there's a general feeling in the UK that National Insurance is ok to pay because it pays for our NHS which everyone loves. Whereas most other taxes people begrudge paying because they don't want the government to have their hard-earned cash because what they spend it on is based purely on what policies they decide on at that time. So if the government budget for the year decides for example it wants to spend several billion on, let's say, building a super-fast train connecting north to south, and you disagree with that.. then you won't want to pay tax to fund it. That person probably thinks that they are happy to pay National Insurance though because we all ❤ NHS right... but alas, it all just goes in the pot. Some WILL go to NHS, yes, but it also gets distributed to all the other stuff the country needs to spend money on.

[@allykropp5276]

I live in Washington but when I really need to go shopping I’ve worked out that I’ll spend less if I drive to another state (Oregon) as Washington has close to 10% sales tax. Oregon has no sales tax haha

[@RRW359]

Don't you have no income tax though?

[@dionnefrancis-brown1533]

VAT is not just on grocery also tradesmen like builders, plumbers and electricians charges Vat on their services for example a plumber may charge you a £100 to fix a toilet he send you an invoice and he might charge £100 for materials and labour and that’s before VAT and then in the Invoice you’ll see the vat amount which is 20% =£20 so in total you pay the plumber £120. In order for a business to charge VAT they must be VAT registered.

[@savannahsnaps6]

I don't like the idea that in America you have a price on a product and especially as a kid you think you have enough for it but then you go to a check out a realise that you have to pay more

[@evan]

yeah I learned the hard way when I walked a mile at 8 to buy a milkshake for $1 only to find out it was $1.06 and I had to walk all the way back to get 6 pennies :(

[@kiradotee]

I think it can be explained much simpler. All it is, is in the UK tax is included in the price. When you buy say a phone cable, the shelf price is £1, you then pay £1! On the receipt you'll then see £0.80 is for the cable and £0.20 is the VAT. Simple as that. Some stuff might not have the VAT (be tax exempt) but you always(!) pay the price you see, whether there's tax involved or not.

[@Phoenix-vu4sn]

"We have healthcare man." 😂😂

[@charlottehardman3669]

This is the kind of thing I wish I was taught earlier in life- I’m currently living in student halls where everything is taken care of for me, but as of next year when I hopefully move out with my boyfriend, we will have to deal with all of this ourselves, and while he is quite tax savvy from running his own businesses at a young age, I have no clue about any of this!

[@lindastakvik2968]

In Norway VAT is 25% (15% on groceries)

[@hannahbrookes1745]

Please could you do a British vs American exams part 2. I found the first one really interesting but I think there are loads more differences than we’re talked about. Love your videos btw especially this series😁

[@johnsimmons5951]

Technically the U.K. has four rates of VAT, though it feels like two: + non rated ( vat is not applied) + zero rated ( vat rate is 0%) + low rate (currently 20%) + high rate (currently 20%) Though it looks pedantic to say the UK has four VAT rates, when we only see either no vat or 20% vat, the Government could change the rates at any time and make them all different as they once used to be.

[@danielv4180]

Energy is at 5% such as gas

[@aitch7003]

Reduced Rate is 5%.

[@piggywiggy1237]

What about a video about the differences between things classed as rude in the UK and America ?? Like how people act and words people use

[@MrTCGAMES64]

Australia just does 10% GST (goods and services tax) and it’s already added into the price.

[@coopsnz1]

Other high consumption taxes as well lefty you didn't mention , I'm a business owner there 10% gst , 10% import duty ,custom fees at the port . Cars tax 10% gst , 5% tariffs , 33% lct , 5% sramp duty , rego & CTP ) fuel tax 60% , liquor tax 80%

[@Celtic_Amy]

I'm American. I have to pay federal state and city income taxes. The sales tax in my town is a 6.5% and a home property tax on a would be $1.81 % on a Median home value of 150K. The other area I lived in had a 10% sales tax a lower property tax. Don't even get my started on cost of heath insurance, but its still a $35 co-pay at the doctor.

[@011y89]

There's no VAT on bread. It's considered a necessity so customers are not charged VAT

[@RushfanUK]

Most food that you would buy is actually zero rated, check out your weekly shop at a supermarket, some items such as ice cream are classed as luxury and are vat rated, vat kicks in for restaurants, pubs and other food service outlets where the food is consumed on the premises.

[@lolerie]

@@RushfanUK holy 💩. Here everything has a VAT.

[@Satankat666]

There are some things that change council tax payments. If you have a place where it is all students or pensioners they don't pay council tax. There is also a single person's discount ( so they only pay 75%), and at least in some areas you can get a council tax deduction if you earn below a certain amount (though the council may not make this well known so there are probably people entiteled to a deduction who don't apply for it).

[@katharinalay8621]

I'm so bad at math, I would suck at going shopping in America and probably lose track of all my expenses😂

[@andywright8803]

Exactly. How is anyone going to know if they are being ripped off or not?

[@jimzecca3961]

@@andywright8803 Not sure what you mean by ripped off. If the store is selling the item for $20 and the store down the street is selling it for $25, the store you are in is selling it for less. Whether you pay tax or not and how much on top of that you pay will depend if the two stores are in the same tax location.

[@andywright8803]

@@jimzecca3961 Easy. You spend $120.35 on groceries and sales tax is 12% (I literally have no idea, this is just a value I plucked out of thin air), and you are charged say $143.87 unless you were aware that 12% of $120 is $14.40 which means that in your head in a couple of seconds you should calculate you should have been charged around $134, and you have been ripped off Aha, I hear you cry, how do you know it's $120.35 before tax? Count it up as you go. Even adding up whilst rounding to the nearest dollar is usually sufficient. I play a little game each week when I go shopping, I try and calculate what the final bill is going to be. I am lazy now. I just assume £1.50 per item, so 52 items comes to £52+£26=£78 and it's usually good to the nearest £5. That way, I can query the transaction at source without taking up time or getting a calculator out. A quick scan through the receipt and you occasionally find programming errors where the price is on the system wrong Is that specific enough for you?

[@patrickdunn7804]

@@andywright8803 uhhh the registers just calculate the price with tax included automatically, and on the screen you can see how much the subtotal (without tax) is, how much tax is, and the combined total, which is what you will be charged.

[@andywright8803]

@@patrickdunn7804 and how are you going to know, if you have a strict budget, or you don't have a card, whether or not you are going to be able to pay before the Lord Almighty cash register demands payment? Addition being that much simpler than percentages, it's dead easy to keep a running total in your head as you stop in the UK and are much less likely to be embarrassed at the till

[@ThomasJM]

In Ontario Canada we have a 13% sales tax called HST or homogenized sales tax it replaced the previous 6% PST (provincial sales tax) and 5% GST (a federal government tax). The 13% tax is split between the two governments now.

[@MissSandow]

They really added 5 + 6 and got 13

[@ThomasJM]

@@MissSandow I think I messed up on my math and it was 7% PST and 8% GST. Both of them were added separate except PST wasn't on certain items at grocery stores, even now tree is no HST on certain items at grocery stores.

[@sunny.7.]

I’m one of those weirdos who gets my sandwich toasted at Subway! Also, in Ohio there’s no tax on takeaway food, hot or cold. Even for to-go coffee!

[@Kelsie154]

Same. I didn't realize that there were people that didn't. 😂 Also from Ohio, as well.

[@Connotative]

I don't know a single person who doesn't

[@notthatyouasked6656]

In my US state, food is taxed if it's "prepared" or considered to be ready to eat. If you buy pre-packaged ice cream, there's no tax, but if you have someone pack a pint of ice cream at your request, it is taxable. Similarly, you pay tax on a hot rotisserie chicken, but not a cold one. Along those lines, if you buy 6 or more donuts, there's no tax, but less than 6 donuts is taxable.

[@lolerie]

In Russia in macdonalds there is different % on different products. 😜

[@ArcticNya]

Did you just say pulling out was contraception?!?

[@bohemelavie1]

Totally agree with Luke about not feeling like you're paying tax. in Australia our GST is also built into the advertised price. You don't ever question the tax. We also have a system similar to PAYE (although I get the impression that in the UK this is opt in where as it is automatic here) and I never think about my tax until tax return time and then suddenly I get some of the money back and it feels like random free money even though it was always my money in the first place.

[@charlottemurphy5615]

I am grateful for the uk government in so much as - I am a permanently disabled person (have been since birth) - all mobility aids and care things I am vat exempt from so wheelchairs and things are for me vat exempt!

[@MeAMoose]

Forgive me for asking, but shouldn't Personal Independence Pay (before known as Disability Pay) cover costs as such ^^?

[@youlknowmyname]

The council tax sounds similar to paying an HOA (Home Owners Association) fee, but this only applies to home owners; hence the name. Not all of the above would have an HOA, however, as many areas or States do not have them.

[@davidb3979]

VAT is the fairest of all UK taxes as it means everyone pays the same on whatever they purchase. If you want the goods or services you pay the equal amount of tax that everyone else does irrespective of background!

[@MatthewTaylor1]

One problem with VAT for businesses - particularly those providing services, is that you pay VAT on the invoices when issued, not when you get paid. If you have big invoices to late paying clients, you have paid the tax well before they pay you - unless you wrote them off as unpaid debts.

[@samuelmoore9201]

you should have the cute ginger on more often I like him.

[@KellyS_77]

Samuel Moore he has his own KZbin channel

[@marksmithwas12]

My council tax rate started at £20 when I moved into my current flat, but as things settled and as I stated to get paid from my new job that started to slowly increase (due to monthly recalculations) until I got to where I am now paying £95 a month

[@timetravellingseamstress]

Taught me better than my tutor did so thanks 😂

[@andysutcliffe3915]

The best VAT example is on petrol, most of the price of petrol is tax(duty), and you have to pay VAT on that tax

[@StephenCymraeg]

I'm a short man. I genuinely don't pay VAT on my shoes.

[@kayleighf317]

in Georgia (where I live and go to college), you pay an 8% state tax, 7% local tax, and $5/night hotel/motel fee if you're using temporary lodging. Both types of sales tax can be exempt if you're staying for business and you're a government employee, but the $5 fee is never exempt since it helps fund the tourism industry in Georgia. BUT you can only be state tax exempt if you're paying with a government FOP like a county credit card or a check. just some more fun facts.

[@sominboy2757]

For brits: California, New York, Washington State(where seattle is), Oregon, Illinois, Minnesota, Washington DC(where Donald Trump currently lives), Virginia, Maryland, New Mexico, Pennsylvania, Massachusetts, Michigan, New Jersey, Hawaii, Vermont, Rhode Island, Colorado and Connecticut are high tax states Texas, Mississippi, Arkansas, Deleware, Nevada, Florida, North Carolina, South Carolina, West Virginia, Maine, Ohio, Indiana, Kentucky, Missouri, Iowa, Kansas, Wyoming, Montana, Idaho, Alaska, Oklaholma, New Hampshire, North Dakota, South Dakota, Georgia, Tennessee, Utah, Wisconsin, Arizona, Alabama, Nebraska and Louisiana are low tax states Also, there are some states that do "tax free weeks or weekends" where the sales tax gets absolutely cancelled temporarily. Usually in August/September during back to school season and in November/December the week after black friday so people can get winter coats and hats.

[@aplam94]

In Canada different provinces have GST (goods and services Tax), PST (provincial sale tax), or HST (harmonized sale tax). I live in Alberta and we only pay GST whereas some other provinces like British Columbia pay GST and PST. Although I heard if you show your Alberta ID card in another province the shop people will only charge you GST. I not sure if the rule still applies.

[@zacharyjr4410]

COLLAB WITH LUKE BIRCH

[@queenapryllm8454]

The tax included in most products/service that why people don't have to think about, makes sense same in Ireland although our VAT IS 23%

[@gsoffice6402]

Interesting points on a confusing subject; difficult to compare citizen/consumer benefit/service per $1 paid. Some US folks say "Oh, well the UK is socialist...paying for citizens health, welfare!" Smiling, I point out US folks pay their federal, state, local income taxes, plus sales tax, property tax, business tax, fuel tax, and government add-on 'fees' and insurance premiums.

[@MsPinkwolf]

weird how some judge a country's socialist status purely by whether it has free healthcare. our taxes also pay for the police, fire service army etc, just as it does in the US.

[@HollyLyne]

@@MsPinkwolf Quite. We're officially a social democracy, although it's moving more and more towards a far-right dictatorship, but hey ho. The Tories have been privatising everything that isn't nailed down for decades, including much of the NHS. So I'm forever bemused by Americans claiming that the UK is a socialist country. Even if we were socialist... what on earth would be wrong with that?!

[@MsPinkwolf]

@@HollyLyne I'm not saying we're not. I'm saying we're pretty much the same as the US apart from healthcare. I don't know why some americans rant about it as if it's some sort of evil system.

[@Huwinwales]

The US system is designed to increase resentment for taxation, for most of Europe the attitude is make paying tax generally invisible. It applies to sales taxes and to income taxes for waged and salaried workers.

[@user-bg2qc3yo7x]

11:07 - I got a disease

[@Liamella23]

Love the sketch adverts, also love the British Vs American on the practical subjects

[@forgoten0987]

Love the serious

[@tamarakaddatz9955]

Evan, the council tax is equivalent to us property or renter's tax. In the US this would be included in your rent cost but in MN you'd get a portion back as a rent credit.

[@pirate_bassist]

oh no,,I like my subway sandwiches heated :o

[@hopi9543]

same? i thought it was normal lmao