Jack Albrecht
2 min readMay 10, 2021

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I'm a long-time US ex-pat. I'm used to hearing all these from people who visit the US and then come back to Europe and ask, "Why X?" I'm commenting here just for one, the tax thing.

The US is a republic of states. Each state has its own sales tax, as do some cities and other speciality taxes apply. In Europe it is much more transparent. Each country has a single federal tax (aka VAT) for most all consumer goods (special goods like vehicles are taxed differently).

If you are Ikea selling a pan for €20 in Munich, you will have the same price for that pan in Hamburg or Berlin, because VAT is 19% all over Germany.

If you are Ikea selling a pan for $20 in Kansas City Missouri, city sales tax is 8.6%, and a stone's throw away in Kansas City, Kansas, the city sales tax is 9.125%. But wait, there is also a MO state sales tax of 4.23% while in Kansas that tax is 6.5%. It would be a logistical nightmare to pre-print labels for all the different localities that can tax in the US. Instead the vendor has basically a Net price and the Gross price is depdendent on where you buy.

On a related note, I think that Europe being much more social in its costs and transparent in its taxing is what leads Americans to think that taxes in the US are much lower than in Europe, when in reality they are often the same or higher in the US for often lower level of service (e.g. healthcare) because the US has so many fees, levies, co-pays, and other taxes that get "forgotten" when comparing just federal taxes.

[edit] typos

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Jack Albrecht
Jack Albrecht

Written by Jack Albrecht

US expatriate living in the EU; seeing the world from both sides of the Atlantic.

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