![]() As indirect subsidy, VAT is less visible as it is not formally discussed in parliament (Hemels 2009). Tax literature has raised concerns on the efficiency of VAT for culture as they are considered “expensive and poor targeted means of addressing distributional concerns” (Borselli et al. Governments in Europe can chose to lower the VAT for books in order to stimulate an increase in literacy, as did the Netherlands lowering the tax for books from 21 to 6%, or Ireland from 21 to 0%, or Sweden from 25 to 6%. This is done by documenting discounted value added tax (VAT) rates across EU Member States from 1993 and by illuminating the effects of fiscal incentives on the prices of selected cultural goods and services and on the cultural expenditure of households on books. ![]() The goal of this paper is to improve our understanding of fiscal rates for cultural goods and services, with a particular focus on books. This paper attempts to fill this void by documenting fiscal rates across the EU Member States over time, including rates for cultural goods, by analysing the local context (i.e. There is, however, little understanding of these measures, especially of fiscal discounts in the European context, and there is also only limited agreement on whether these tools should be used. An economics textbook solution to this inefficiency is fiscal policy: by the means of taxes and subsidies consumption of cultural goods and services can be steered so that efficient outcomes are obtained. Therefore, the action of policy makers is required so that the right quantities are supplied and consumed. This is caused by the fact that markets do not internalize externalities and thus trade does not occur at efficient quantities. Welfare theory informs us about the existence of dead-weight if goods and services that incorporate externalities are consumed. Those who read books, go to theatre or attend music concerts, do not only increase their own utility, but generate also positive effects for the society, for example, in the form of improved education and literacy. ![]() Cultural consumption is associated with positive externalities. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |