this post was submitted on 12 Jul 2025
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In the EU, there are typically three levels of VAT, with members having some leeway to choose which applies to what.
Health services, public transport, rentals/housing and education are often exempt, while most groceries and medications are at a reduced rate. eg. Germany has 7% and 19% as the reduced and normal rates.
Income taxes are additional and (in most EU countries progressive). Social insurances are often separate, and similarly progressive.
This works alongside the basic welfare nets, which ensures that people have just enough to survive if they fell through the cracks. Without this net, even the reduced rates on groceries would seem punitive.
Not every EU country is equal, but there is a goal to provide these societal safety nets alongside fair taxation, which is invested back in society.