No, you should think of the tax man standing between the customer and the seller. Whether he takes the bank notes from the customer's hand just before, or from the seller's hand just afterwards, really doesn't matter.
The legal incidence of the tax is that the shop writes a check to the taxman, but this is not very interesting. The economic incidence is fuzzier and more interesting, and depends on the elasticities -- if the tax were made 500 euros, would the customer fork out more or would Apple collect less? This obviously depends on lots of things. It seems bizarre to me that when we discuss VAT as a consumption tax we follow neither of these things, and instead assign it to the purchaser -- but this is just some convention.
(I'm imagining sales tax not VAT for simplicity. Or that the company made the goods entirely from scratch. I think VAT will be collected on the wholesale price when the computer crosses the border from China, and then on the retail mark-up when it's sold... but no change to the moral of the story.)
By "sociopathic" you mean amoral. Like plants in your garden. The weeds will take over if you let them. Personifying them doesn't help with understanding this. But whether you pay the gardener by handing him the cash, or by pinning it to the thorn bush for him to collect, really really doesn't matter.
> No, you should think of the tax man standing between the customer and the seller.
The issue is that VAT, in practice, ends up being a game where the purchaser hands money to the company, they hand part of it to the taxman, then immediately get most of it back anyway (by maximizing their tax claim). That's why it's assigned to the purchaser: in the end, it's the only subject that is actually out of pocket for the full amount, the company having reclaimed most of it back from the taxman. This is why governments love VAT: because it's a tax on people, not on companies. I understand why somebody arguing for flat or nonexistent taxes might like it, but it certainly is not part of the solution from the perspective of making businesses pay their fair share - the opposite, in fact. In that sense, it's pointless to use it to model anything beyond price pressure on consumers; and that is not what the problem is about.
> Or that the company made the goods entirely from scratch.
That's one of the problems of economic theory (or rather Econ 101, as we discussed earlier): everything is so simplified that it ends up bearing to resemblance with reality. Nobody makes anything from scratch anymore, and the mess that is IP law (or other rules around "services") makes it so that a company can basically decide how much of this or that tax they actually want to pay by moving entities around the world and making up enough input vat to offset most of their output vat. And of course, they want to pay barely enough to avoid jail, so in the end, the high-tax societies from which they extract most profit are actually the ones that end up out of pocket.
> The weeds will take over if you let them.
Weeds is a good parallel except it isn't, since I cannot extract money for the gardener from weeds - whereas I absolutely can extract money from companies to shore up the impact they have on the societies they benefit from. That's the problem.
No, you should think of the tax man standing between the customer and the seller. Whether he takes the bank notes from the customer's hand just before, or from the seller's hand just afterwards, really doesn't matter.
The legal incidence of the tax is that the shop writes a check to the taxman, but this is not very interesting. The economic incidence is fuzzier and more interesting, and depends on the elasticities -- if the tax were made 500 euros, would the customer fork out more or would Apple collect less? This obviously depends on lots of things. It seems bizarre to me that when we discuss VAT as a consumption tax we follow neither of these things, and instead assign it to the purchaser -- but this is just some convention.
(I'm imagining sales tax not VAT for simplicity. Or that the company made the goods entirely from scratch. I think VAT will be collected on the wholesale price when the computer crosses the border from China, and then on the retail mark-up when it's sold... but no change to the moral of the story.)
By "sociopathic" you mean amoral. Like plants in your garden. The weeds will take over if you let them. Personifying them doesn't help with understanding this. But whether you pay the gardener by handing him the cash, or by pinning it to the thorn bush for him to collect, really really doesn't matter.