Comparing Ratio of Direct and Indirect Taxes
A tax is a tax is a tax. But, for whatever reason the monies end up in the government coffers by different routes.
They are referred to as Direct Taxes and Indirect taxes.
The ratio of direct tax to indirect tax of four major industries is enlightening.
Germany gets 58% of her taxes from INDIRECT taxes.
Japan gets 56% of its taxes from DIRECT taxes.
The UK, like Japan gets a majority 57% from DIRECT taxes as well.
Compare these figures to the US which gets 91.6% of its taxes by DIRECT tax.
Perhaps someone smarter than I can explain more clearly but I understand that a direct tax is a tax that is paid – income tax, corporate tax and so on. An indirect tax is collecte – sales tax, value added tax and so on.
In any event, my dad was right, there are still two things every person must do – die and pay taxes.
And, Japan differs only in how it they collect them.
