Linked by Thom Holwerda on Sun 5th Mar 2006 21:32 UTC
Apple This week saw the introduction of various new Apple products. Everybody has their own opinions on these new products, and websites all over the world saw enough discussions about the integrated video card of the Mini, the 'HiFi-ness' of the iPod HiFi, and more. Another issue, however, which got considerable less attention, was that of pricing. And no, I'm not talking about expensive-or-not (God, no). I'm talking about price differences between the US and Europe. And quite frankly, it's pissing me off. Note: This is this week's Sunday Eve Column.
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Taxes, Tariffs, Nontariff Barriers
by asupcb on Sun 5th Mar 2006 22:27 UTC
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The VAT taxes don't operate exactly like a sales tax because the product is taxed every step of the way in the manufacturing process which means that they may be including VAT for the processor, case, powersupply, hdd, dvd drive, etc. in the cost of the product. I'm not exactly sure how VAT works in each country but it is most definetly not a sales tax. For one thing a sales tax is an external and not interal tax which allows you to see how high your taxes are in an area instead of merely having the cost included in the internal price tag of the product. VAT is one instance of a non-tariff barrier to trade between countries. Other non-tariff barriers include complex regulations and quotas which may raise cost by any where from 5%-15%.
Also while the EU typically maintains low tariffs for most product segments it may have much higher tariff costs for certain product segments such as electronics.
Not to make you think that I'm Europe bashing but the EU as well as the US need to start liberalising their governments and let in some competition. I mean look at how well Britian is doing in regards to most of the rest of the continent, at least until Blair's most recent reappointment as PM, but hopefully Labour will give him the boot and bring Gordon Brown in before Blair's silly policies start harming the economy.

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