6 ms·

It also makes raising sales taxes more opaque, and reduces the political accountability (and cost) for doing it.

by nickff 12y ago

netrus 12y ago
In Germany sales tax changed once in the past 20 years. Everyone noticed it.
- Zikes 12y ago
  In the US it's set at the state and city levels. It varies so widely from city to city that unless you're a resident you'd never notice a change. The changes are frequent, too. Since they're so localized, they're often heavily involved in local politics. Recently my city was very divided over a half-cent tax hike to build a better high school.
- maxerickson 12y ago
  In Michigan, the sales tax rate is specified in the state constitution and can only be changed by holding a statewide vote. The rate last changed in 1994 and 1963 (1963/1964 was when the modern constitution was put in place). A proposal to increase it failed this month, with no votes from 80% of people that bothered to vote (~20% turnout). It would be interesting to see a survey of what it takes to change the rate in various states.
  - balls187 12y ago
    Michigan has a single tax jurisdiction, which specifies the tax rate. In other States, like WA for example, sales tax is a composite of jurisdictions: State, County or City, Special Tax Jurisdiction. There is a graphical representation of Tax Jurisidictions in the US: http://www.taxrates.com/calculator/ http://www.taxrates.com/calculator/ Note: I work for the company.
vacri 12y ago
It's far better than having no idea what your items will actually cost at the checkout. I remember walking into a McDonalds somewhere in the US deserts, and ordering three mcchickens off the $1 menu. A cheap way to get lots of biomass when travelling on a shoestring. "Certainly sir, that'll be $3.24". But it's 3 items... off the $1 menu... which should be $3. I honestly think that half the hot air around taxes in the US is because the mechanisms for actually handling them are irritating. Lots of loose change, ridiculously complex tax environments for accountants, inability to know beforehand the final price of something... Back here in Australia, if something costs $5, that's it. It doesn't matter to you whose cut goes where. You want the object, it's $5. Not $5.40, discoverable later in the chain. The tax in this system is less opaque, because it's right there, included in the price. It's not something that suprises you at the end as an irritating thing making the process more complex. In any case, when you buy something, no-one complains that the retailer made 20%, the distributors made 30%, and the wholesaler made 40%. People only whine about they government's 10%. Most people are utterly clueless about which business parties get what sort of cut (witness the endless complaints about online app stores 'stealing' 30%...), so why should specifying how much the government makes be special? If your receipt instead told you how much the wholesaler made, or your system added on the wholesaler cut after the sticker price, everyone would be complaining about those greedy wholesalers. And, as others have said, sales tax certainly has accountability. Australia's GST has been 10% since it was introduced in the mid-90s (replacing a confusing hodge-podge of existing sales taxes). It hasn't changed, and the political parties fear changing it because it is a huge political negative to do so.

It also makes raising sales taxes more opaque, and reduces the political accountability (and cost) for doing it.

by nickff 12y ago

It also makes raising sales taxes more opaque, and reduces the political accountability (and cost) for doing it.

netrus 12y ago

In Germany sales tax changed once in the past 20 years. Everyone noticed it.

Zikes 12y ago
In the US it's set at the state and city levels. It varies so widely from city to city that unless you're a resident you'd never notice a change. The changes are frequent, too. Since they're so localized, they're often heavily involved in local politics. Recently my city was very divided over a half-cent tax hike to build a better high school.
maxerickson 12y ago
In Michigan, the sales tax rate is specified in the state constitution and can only be changed by holding a statewide vote. The rate last changed in 1994 and 1963 (1963/1964 was when the modern constitution was put in place). A proposal to increase it failed this month, with no votes from 80% of people that bothered to vote (~20% turnout). It would be interesting to see a survey of what it takes to change the rate in various states.
- balls187 12y ago
  Michigan has a single tax jurisdiction, which specifies the tax rate. In other States, like WA for example, sales tax is a composite of jurisdictions: State, County or City, Special Tax Jurisdiction. There is a graphical representation of Tax Jurisidictions in the US: http://www.taxrates.com/calculator/ http://www.taxrates.com/calculator/ Note: I work for the company.

vacri 12y ago

It's far better than having no idea what your items will actually cost at the checkout. I remember walking into a McDonalds somewhere in the US deserts, and ordering three mcchickens off the $1 menu. A cheap way to get lots of biomass when travelling on a shoestring. "Certainly sir, that'll be $3.24". But it's 3 items... off the $1 menu... which should be $3. I honestly think that half the hot air around taxes in the US is because the mechanisms for actually handling them are irritating. Lots of loose change, ridiculously complex tax environments for accountants, inability to know beforehand the final price of something... Back here in Australia, if something costs $5, that's it. It doesn't matter to you whose cut goes where. You want the object, it's $5. Not $5.40, discoverable later in the chain. The tax in this system is less opaque, because it's right there, included in the price. It's not something that suprises you at the end as an irritating thing making the process more complex. In any case, when you buy something, no-one complains that the retailer made 20%, the distributors made 30%, and the wholesaler made 40%. People only whine about they government's 10%. Most people are utterly clueless about which business parties get what sort of cut (witness the endless complaints about online app stores 'stealing' 30%...), so why should specifying how much the government makes be special? If your receipt instead told you how much the wholesaler made, or your system added on the wholesaler cut after the sticker price, everyone would be complaining about those greedy wholesalers. And, as others have said, sales tax certainly has accountability. Australia's GST has been 10% since it was introduced in the mid-90s (replacing a confusing hodge-podge of existing sales taxes). It hasn't changed, and the political parties fear changing it because it is a huge political negative to do so.