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Old November 17, 2008, 08:58 AM
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Default We have that tax too - by a different name


Thanks for adding.

We pay it too. We used to have Sales Tax and Wholesale Tax. The wholesaler pays wholesale tax and the retailer pays retail tax on top of the wholesale tax already paid - sometimes, sales tax was around 30% but usually it was 22%.

BUT, what people didn't know was, the Sales Tax was calculated on the Wholesale Price after the wholesaler had paid his wholesale tax for bringing it into the country, and Not the selling price. And this Sales Tax was paid To the wholesaler.

So the wholesaler might buy an item for $5 and pay 11% tax taking the item to a wholesale price of $5.55. This had the sales tax added on - let's use 22% for example - for a total wholesale price of $6.77 ($1.77 in total tax). This could then be sold in the shop at whatever price. Let's say it was a T shirt with print and has a retail price of $30.

Under our New system a 10% flat tax based on Sales Price. So a $30 item would then sell for $33 ($30 + 10% tax). Thus the $30 shirt would now bring tax revenue of $2.72 ($1 more than previous) - $30 divided by 11.

This tax was applied at each stage and credited at each stage of purchase...

Wholesaler sells $5 shirt for $5.50 to retailer. And thus owes $.50 to tax man.

Retailer sells shirt for $30 and has $2.72 tax owing. but as .50 has already been paid when the shirt was bought, only owes tax man $2.22. Either way, tax man then gets 10% of Sales Prices as tax. And has turned each and every business in the country into tax collectors.

Result = coffers become flooded with tax dollars.

Essential Food items are exempt. No separate state taxes. Just one tax. Simple.

Of course, a flat 10% on all goods and foods would be far simpler as well.

Michael Ross
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