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Consumption taxes such as sales tax are considered indirect taxes in taxation theory.
by anticensor 6y ago
Consumption taxes such as sales tax are considered indirect taxes in taxation theory.
- jointpdf 6y agoYou’re right, that is the technical terminology (because the government does not directly collect the sales tax from the consumer, the stores do). Still, from the point of view of the consumer it’s “direct” (in ordinary language, not economese). As in: “concretely and transparently makes product X more expensive for me”. With an upstream carbon tax, it’s unclear how it affects the prices of consumer goods since it has to filter through the entire supply chain first. It’s not like “this pack of gum produced 3.14 pounds of C02, so you—dear consumer—will be taxed an additional $0.42”. That would be a nightmare to administer.