When Spain’s new prime minister, Mariano Rajoy, violated his campaign promise not to increase the top Value-Added Tax (VAT) rate and instead increased it to 21 percent last summer, Quim Marce knew he was in trouble. His little 300-seat theater in the village of Bescano had been forced to charge a VAT of 8 percent on each ticket, and the new rate of 21 percent would keep his customers away. With unemployment at 25 percent in Bescano, he knew that his very livelihood was threatened. He told National Public Radio (NPR) reporter Lauren Frayer, "This is the end of our theater … we've got to do something so we don’t pay this 21 percent, and we pay something more fair."
Frayer exercised some literary license, no doubt, and explained that while gazing out a window one day, Marce got an idea: sell carrots which are only taxed at 4 percent as a staple and give away free admissions to his shows. As Marce explained,
We sell one carrot, which costs 13 euros — very expensive for a carrot [$16.50!]. But then we give away admission to our shows for free. So we end up paying 4 percent [VAT] on the carrot, rather than 21 percent, which is the government’s new tax rate for theater tickets.
Now Marce is getting national notoriety, and his theater is full. He even makes a joke about the carrots:
There’s always an announcement before the show begins that says photos are not permitted and that you should turn off your cell phone. So now we’re going to add: No chomping loudly on your carrots during the show!
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