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Toyota puts U.S. workers on alert: Made-in-Japan Camrys cheaper

Discussion in 'Auto News & Rumors' started by hemirunner426, Nov 20, 2017.

  1. hemirunner426

    Level 2 Supporter

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    We don't really have free healthcare,,our federal and provincial income tax rates are much higher in Canada.Nothing is free.
     
  2. Doug D

    Doug D Virginia Gentleman

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    This is one reason I resist purchasing Toyota - whether it be used or new. To be honest, all of their models are fugly. The Tundra is just plain ugly and the Camry/Corolla are "meh".

    I rented a Corolla for 10 days while my Ram was in the shop (planned on only 4-5 days [long story]) and while it was nice, I was not overly impressed. Except for the backup camera (which I got use to real quick), I liked the interior of my wife's 2010 Journey better than the Corolla. The interior of the Corolla was on par with interior of my '06 Ram.

    I have a difficult time buying from a company whose country attacked us (Pearl Harbor). Yeah, it almost 76 years ago. I have forgiven them, but not forgotten.
     
  3. MPE426HEMI

    MPE426HEMI Well-Known Member

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    Yes, for anybody that thinks there's free health care in Canada.....it's not free. You just don't receive a bill in the mail every month for it, it's transparently included in that tax rate.
     
    Devildodge likes this.
  4. Lee N. Burns

    Level 2 Supporter

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    Yes, and we 'mericans don't get to play a lottery to purchase hospital equipment either.
    [​IMG]
    Nor do we get chances to win cars not built in Canada... (Other Heart and Stroke Lottery prizes)
    [​IMG]
    It amazes me that there is zero pushback for this when Canada has an auto industry, but ship any Canadian-built car over to Germany and it gets hit with a 19% tax while it's in port. I've come to expect this stupidity from Americans, but come on Canada!
     
  5. Dave Z

    Dave Z It's me, Dave
    Staff Member Supporter

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    That is true. It's also around $4,608 per person vs $9,541 in the US.
    List of countries by total health expenditure per capita - Wikipedia (at https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita )

    Average lifespan in the US: 75 for men, 80 for women. In Canada: 78 for men, 83 for women.

    Infant mortality: 5.1/1,000 vs the US, 6.5/1,000 (lower is better) — warning: somewhat outdated figures (2007)
    Infant mortality rate - Canada and world results (at http://www.conferenceboard.ca/hcp/Details/Health/infant-mortality-rate.aspx?AspxAutoDetectCookieSupport=1 )
     
    MPE426HEMI likes this.
  6. MPE426HEMI

    MPE426HEMI Well-Known Member

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    Some good stats there.
     
  7. voiceofstl

    voiceofstl Well-Known Member

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    It cost more int he US becuase the lawyers have to get some action. MY main question is it cheaper to build a car in Canada then in the US?
     
  8. KrisW

    KrisW Active Member

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    That "19%" is sales tax ("Umsatzsteuer"),and it also applies to German-built cars sold to private individuals in Germany - personal imports are personal sales, so the sales tax applies. Importer companies can bring product in without paying upfront like this, but they still need to charge the sales taxes to private customers and remit that money to the government.
    ...But we're specifically speaking about Canadian-built cars, the current import duty is only 10%, but it will reduce to zero by 2022 under the recently-signed Canada-European Trade Agreement (CETA).

    FCA is a major beneficiary of this new deal, as it has a lot of capacity in Canada, and so could conceivably build cars in Ontario for export to both the EU and USA without incurring duties in either destination.

    ...And I'll bet the difference in income tax paid by a Canadian over his or her American neighbour is a lot smaller than the average cost of a medical insurance policy in the USA.
     
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  9. Lee N. Burns

    Level 2 Supporter

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    Could we pull New Jersey, Philadelphia, Miami, Detroit, Cleveland, Chicago, Atlanta, St. Louis, LA and DC out and re-run those stats? I'll even leave NYC in since Canada has Toronto.
     
  10. Lee N. Burns

    Level 2 Supporter

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    The 19% is added to the MSRP, which includes all taxes paid in the US or Canada at every step of production. While it's true the 19% applies to German citizens buying German cars, they aren't paying any US/Can taxes (for example the SSI taxes of the guy installing the tires, or the school taxes where the assembly plant is located). This is a double taxation which coincidentally has the same effect as a tariff. If you'd like to see it in action, visit the particular websites of a vehicle that sells in both places (like a Jeep Cherokee and a Volkswagen Tiguan). Convert the prices to dollars and you'll typically see about a 20% higher price for the NA car selling in Germany vs. the opposite situation where the prices will be competitive.
     
  11. MPE426HEMI

    MPE426HEMI Well-Known Member

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    Yes, it seems the somewhat exotic cars are choice of these lottery prizes. I always say, I hope the winner can afford to insure and repair those things. There was a story on the news lately about a person who won the home lottery and wanted to sell the home below market value, just to get some cash and get out from under owning the home because the charges (utilities and such) were to much for their paycheck, as the house was way bigger than they could ever afford. The big story was, of course, people complaining about "giving the house away" for such a cheap price and claiming the winner didn't deserve the house, Lol. Sometimes a prize is not all happy and fun like one would think. When asked about the price, the winner said it was more money than they ever had and was sufficient and would benefit them. So, how could anyone argue? I guess.
     
  12. KrisW

    KrisW Active Member

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    @Lee N. Burns European practice is to quote the price of goods as "all-in", including sales taxes. American practice is to quote the tax-free price.

    So, let's keep all the prices in dollars and ignore shipping costs entirely, and the surprisingly high cost of adapting a non-US car so that it's legal to drive in the US.

    MSRP in USA of $20,000, sent to EU. Add 10% import duty plus 20% sales tax (which is the average) = $26,000 advertised. Customer pays $26,000.

    Going the other way, advertised price in Europe of $24,000 = tax-free price of $20,000. Send to USA, add 6% import duty = advertised price of $21,200. Customer is charged that amount plus state, county and city sales taxes, probably comes out at $23,500 or so.

    True, the USA isn't charging as much in import duty as Europe is, but that's only because we talked about passenger cars. Light-duty goods vehicles are levied at over 20% by the USA (it's an old law called the "Chicken Tax", in retaliation for European taxation of cheap, American poultry way back in the 1960s).

    But what you're really seeing is that European countries levy higher taxes on goods, period. Not that they levy higher taxes on American goods.

    Comparing model prices across markets is really difficult, because the price a particular product can command changes a lot. You'd be absolutely amazed to see how much Europeans will pay for American-brand jeans. Similarly, Jeep is a more up-market brand here than in the USA - Cherokee pricing is deliberately higher to reflect that.

    It's not double taxation. Imagine I import a Canadian-built car that I pay $40,000 for. Because the car is bought for export, it is not subject to sales taxes. I have given FCA $40,000, but have paid no tax to the Canadian government. (Now lets assume I live in Germany, rather than Ireland, because Ireland has additional taxes on cars that will confuse things). When my car lands at port, I need to pay the duty for importing it, and then the sales tax due on it because for sales-tax purposes, the "sale" occurs at the dock. The duty is around 10%, but the sales tax is 19%, so that's 29% on top of my $40,000, or $11,600. That money goes to the German government. I've been taxed by "my" government, but not by the US or Canadian. So no double taxation.

    True, some of the money I gave FCA will eventually get to the Canadian exchequer, but that's not me paying taxes, it's FCA paying its taxes.

    By the way, if I had just moved from Canada, and the car had been mine already in Canada, I'd pay no duty or taxes, because there are exemptions in place for bringing personal property, precisely to avoid double taxation.
     
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  13. MPE426HEMI

    MPE426HEMI Well-Known Member

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    By the way Lee, nobody wants to buy tickets on a North American car, haven't you heard? They're junk. Bahaahaa.
     
  14. somber

    somber 370,000 miles
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    From several studies that have come out in the past few years, it is no longer the case that state workers are "taking lower incomes than in the private sector". An excerpt from this article:

    The report found that state governments pay on average 6.2 percent more per hour in wages and benefits, including pension benefits, than the private sector for the 22 major occupational categories that exist in both sectors. Additionally, the report found that no state government pays its employees on par or below what the private sector pays; that the largest percentage difference in pay between the public and private sector is 40 percent; and that the highest difference in pay is $61 an hour. This disproportionately generous public sector compensation is a major driver of unfunded state and municipal pension liabilities across the country, which have been accurately described by pundits and experts of all political stripes as looming financial crises.

    And for federal workers, the CBO reported that total compensation was 16% higher than for comparable private sector positions.
     
  15. Lee N. Burns

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    Not a ton of time to go into this, Thanksgiving and all... But the a few points... Sales taxes in the US are by state and typically average from 0 to perhaps 8%. US MSRP prices factor in all taxes paid whilst "adding value", baked into the MSRP.

    The VAT is added to the US MSRP, not a lower price that removes some portion of all the value-added in the US.

    European (and Asian) exports have such taxes rebated back to the manufacturer. It's up to the manufacturer what to do with this subsidy... They can either lower the price or keep it, if the market isn't price sensitive. I imagine it's usually something in-between to hit ideal price points.

    Your mention of the "chicken tax" is oft repeated, but totally irrelevant. It's applied to light duty vehicles with a separate cargo area (pick-ups). You left out that part. No one imports pick up trucks into the USA.

    I'll be back on Monday. Peace out!
     
  16. Dave Z

    Dave Z It's me, Dave
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    They are counting total compensation, not salaries — that is, including benefits. Somehow I doubt they are making a conservative estimate of benefits, or taking into account the fact that many aren’t going to collect them.

    The salaries are not the same if you leave out the pensions.

    There’s space for them to monkey around with the numbers in their report/article given their rather ... donor-serving, shall we say? ... history -> Citizens Against Government Waste - Wikipedia (at https://en.wikipedia.org/wiki/Citizens_Against_Government_Waste )

    My favorite is the dead people writing letters...
    “In 2001, the Los Angeles Times reported that at least two dead people sent a form letter by CAGW opposing the antitrust case against Microsoft to Utah Attorney General Mark Shurtleff. According to the Times, family members crossed out the names on the form letters and signed for them. This brought about the "Microsoft Supported by Dead People" controversy[8] from Microsoft's and CAGW's opponents and the CAGW's response that they were not tied to Microsoft or to ATL despite Microsoft having donated money to CAGW.[9]

    ... and creating an outcry over a fake initiative, to push people against open source software.
     
  17. MJAB

    MJAB Well-Known Member

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    The value added tax is paid on all new goods and service sold in an European Union country and whose purchaser in resident there and/or will use the good or service in a country of European Union.
    Actually the rate and the way it is applied differs from country to country.
    For example in Italy is applied to all transactions, being between companies or to final customers.
    If a company buys a screw in Italy than it will pay 22% of VAT on that screw.

    From European Union directive on VAT
    "...
    (5) A VAT system achieves the highest degree of simplicity and of neutrality when the tax is levied in as general a manner as possible and when its scope covers all stages of production and distribution, as well as the supply of services. It is therefore in the interests of the internal market and of Member States to adopt a common system which also applies to the retail trade.
    ...
    (7) The common system of VAT should, even if rates and exemptions are not fully harmonised, result in neutrality in competition, such that within the territory of each Member State similar goods and services bear the same tax burden, whatever the length of the production and distribution chain.
    ..."

    "Neutrality in competition", that is the reason why the tax is paid when a good arrives to the border from an extra-EU country.
    Example: why should I italian company have to pay VAT on all materials, parts, services, ... while manufacturing a product and an importer would have the privilege to wait to pay VAT till the customer pays the invoice and than receive the good he imported?

    VAT is a "neutral" tax, but in theory, since I italian company have to pay VAT for all material, parts, services, ... I purchased while I am still building the product that I will than sell to a customer.
    VAT for a company can be not neutral since one incurs in financial costs (+ administrative costs).

    You wrote about the tax is rebated back to the manufacturer, ... and that is subsidy.
    When the new good or service is for export in a non European Union country, than VAT is simply not applied.
    The only sum that a company could get back is the VAT already paid (for example I buy a car, pay the VAT and than export it instead of register in an European country).

    The VAT for a car entering in European Union is not paid on U.S.A. MSRP, but on the cost of the new good + shipment as deducted from the invoice of the car.
    The company that imports the good is usually a OEM's local company, a distribution company or a dealership. The price is not the retail price of the good to the final customer.

    The U.S.A. "chicken tax" is 25% and is an import tariff and applies not only to pickups, but also to any commercial vehicle that is not for passengers transport. A van is charged with 25% tariff.
    NAFTA manufactured commercial vehicles, that are not for passengers transport, have no 25% tariff.

    A Ram Promaster manufactured in Italy would be subject to 25% import tariff in imported in U.S.A..
    Ram Promaster City, imported from Turkey, arrives with back seats, so as passenger car, than is transformed in U.S.A. to commercial vehicle.
     
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  18. BobbiBigWheels

    BobbiBigWheels I'm likely at work...
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    @MPE426HEMI "Yes, for anybody that thinks there's free health care in Canada.....it's not free. You just don't receive a bill in the mail every month for it, it's transparently included in that tax rate."

    Turning 18 and getting a bill in the mail for "MSP" had me scratching my head. Our healthcare is not free - 5% GST and 7% PST in BC, coupled with income tax eating a third of my paycheque, then MSP (Medical Service Plan) bill at $120 a month. We just have socialized health insurance. We do get a monthly bill in many provinces for healthcare.
     
  19. GasAxe

    GasAxe Well-Known Member

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    Learn something new everyday. I thought all the money just came out of your taxes. I bet people in the US would have a cow if they realized "free" healthcare came with a monthly bill.
     
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  20. Bob Lincoln

    Bob Lincoln "CHECK FAULT CODES"
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    If I understand correctly, GST and PST are federal and state sales taxes? So while substantial, they are unrelated to health care, are they not? We have a 6.25% sales tax in Massachusetts, some states are near 9%, and also a local sales tax applies in some cities, often about 3%.

    I work for a large company and am fortunate that my employer pays about 80% of my health care premium. So my cost is about $120 a month, also. I would not expect, and I don't think many Americans believe, that a single payer plan or national health insurance would be free.
     

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