Sales tax is a tax on sales. The rate of course varies depending on locality. Often there is a cap or some sort of rules.
Each time an item is sold it is taxed again. Cars are what I think of first when I think if significant taxes and re-taxation on an individual item.
I am looking for some item that has been taxed far and above its value. What items come to mind? Does anyone have an example of something that has been sold hundreds of times and taxed each sale? Also, do some cities not have a cap on sales tax?
Hundreds of times is a tall order. Things are only subject to sales tax when they are sold to an end consumer, so the manufacturer selling to the wholesaler selling to the jobber selling to the retailer all goes untaxed. However, when there is a significant used market for an item, then there’s the potential of getting sales tax on it more than once. Besides cars, the only significant used market I can think of is for books. I can see one book being sold a dozen times or so in an exceptional case, but hundreds? It’s unlikely.
I bet CDs are really high on the list. Back in the Napster days, before CD sales completely plummeted, people would sell their CDs to used stores (which still existed as well), buy other used CDs, rip those new ones, and repeat the process. I bet there was a ton of retaxing on those. Add in their durability (compared to books), and that’s a good guess.
There’s something more that’s being missed here, I suspect.
Your personal belongings may also be subject to a property tax, just like your real property is. No, they’re not going to rampage through your home and total up every book, clothing item, sofa, and kitchen utensil. But you may pay an annual property tax on your larger items, like your car or yacht or private airplane.
It’s not called that, but that’s what it is. For example, my annual car registration notice contains an itemized list of amounts I have to pay, including a “Registration Fee” and a “License Fee” and some miscellaneous other stuff. If I’ve got this right, the “Registration Fee” is just a fee you pay the DMV for the service of renewing your records for another year. But the so-called “License Fee” is, in fact, a property tax, based on the value of your car. It goes down year after year as your car gets older and loses value, according to some formula somewhere.
There’s another taxing scheme, uncommon the Unites States but used elsewhere, called the “Value Added Tax” or VAT, in which a tax is indeed applied to an item at each stage of the manufacturing / wholesaling / retailing chain, from raw materials to final end consumer. The way it’s computed may tend to hide this (after all, the final consumer just buys the item and pays one price for it), but all those layers of taxes are built in there.
With a VAT, an item is not taxed at its full value each time it changes hands – that would indeed be multiple taxation. Rather, as an item goes through the stages from raw material to end consumer, its value increases at each stage as more materials and/or more workmanship and/or more services (like transporting it) are added. At each stage, it is this increased value (over its previous value) that is taxed.