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If I pay someone to clean my apartment, I have to pay "value-added-tax". Can someone kindly inform me, what value is added? If anything is a fund transfer, of which I've paid income taxes, and the person receiving it, will (normally) pay income taxes.

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if you tried to sell the apartment before the cleaner did their work, wouldn't the potential buyer think of how much it would cost them clean it up? :-)

@lxo That wasn't the point.. many or most services doesn't add any "value" to society, thus shouldn't be taxed as such.

Same for foods. Shouldn't be any VAT on that (maybe unhealthy foods). You need food, it adds no value besides keeping you alive, (to pay more taxes). You do poop some out, but I pay sewage taxes, so that should cover it. And really, that sewage heat, is being used to heat water, which is sold to people as heating. So technically they should pay me back to take a dump. ;)

if you think the service and the food don't provide you with any value, how come you even pay for them? even if the value they provide just cancel out natural (or artificial) decay, it's still value that you recognize when you pay for it. though I'll oversimplify, they're still worth the congealed human labor that went into them. you may want to refer to the canonical book that economists of all leanings, and interested laypeople resort to to understand the notion of value: volume I of The Capital, by Karl Marx. nevermind the propaganda about his political inclinations, it's as objective and scientific an analysis as one could possibly hope for, and it's quite accessible too. whether or not you support his activism, it was spelled out elsewhere

@lxo I'm happy to pay for foods that mother earth provided, and to pay the people who grew and nutured for it, or whomever sold it on. But the governemt should have no stake in that at all with "value added taxes".

@jinxd If you just buy the bucket, mop and detergent yourself, you can do that and don't have to pay the cleaner. You are willing to part with the money for their work because their work provides you value.

The tax definition is simple: The value added is the revenue minus already-VAT-taxed cost.
@jinxd

what value is added?

Value added = turnover minus intermediate expenditure

That wasn't the point.. many or most services doesn't add any "value" to society, thus shouldn't be taxed as such.

Are you saying goods should be taxed but not services? Why?

@andy

> Are you saying goods should be taxed but not services? Why?

Yes. "Things" create a value, it adds value and there is a cost attached to "things". If you need to service that item, there is no value added. Whatever income for the service done, is taxed anyhow by the worker.

We didn't use to have VAT on services, now we do. VAT is also very high.

@jinxd So if the cleaner's service was worthless, why would you hand over money?


Yes, it's debatable whether taxes are too high / low. But surely you're taxed for all the value that was incrementally created along the entire chain (cleaning products + cleaning , etc.) .

"Value" here doesn't necessarily mean an intrinsic quality of something. It's basically a financially measure of how much supposedly was gained by the creators of the products and services; it's this proxy measure on which you're taxed.


Now what happens with the all the collected taxes that's an important question. How should it be spent?

@andy I said not it was worthless..it had value from the point that people enjoy living in a clean house, and the person doing the job can feed their kids. My time is also worth something. if i cleaned it myself, should i pay tax for that? No, nothing was gained. the cleaning peron would pay taxes anyways (in most cases ;)

@jinxd

if i cleaned it myself, should i pay tax for that

No, because no one made any money in this situation.
@jinxd

No, nothing was gained.


In that case you should NOT pay any VAT!

If your house was cleaned by a not-for-profit organization and your payment only covered their immediate expenses (like getting to your house) than there is no VAT.
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