Poll: Your view of sales tax

Simple question: how do you view sales tax? USAian answers preferred but Canadians and others are welcome to add comments relevant to their locale.

Here in Tennessee, our sales tax is about 9.5% which I believe is the highest in the nation.
Yes, I notice it and budget for it. I joked to my local grocer yesterday that I think of it as a tip.

Here in the UK, the equivalent, VAT, is normally just part of the sticker price. I think it is the same in the rest of Europe. It was the same before VAT was introduced, with what was then called “purchase tax”. Consumers just don’t have to think about it. The US system of adding it on at the checkout seems stupid to me, and is probably part of the reason why Americans tend to have such irrational level of hatred of taxation in general.

Yeah, I was impressed when I went to Europe and the price listed was actually the price paid. It seemed like such a simple system. The US system of adding on (in our case 8.25) is stupid.

One thing about the Europeans. They hated to make change. You never see that in Amerca.

My position is that the US should eliminate all forms of taxes except a flat rate VAT. Then it should outlaw permanently and forever the income tax (and all other forms of taxation).

I’d rather not have this thread turn into an anti-tax rant, thanks. Go study the economic impact of regressive taxes and start your own thread; I’ll be happy to chime in there.

antitax rant? I said I support a flat rate sales tax? Is that anti-tax? and…how is a flat rate regressive?

We don’t pay sales tax here, and it’s always jarring when I shop out of state. I don’t understand why it can’t be added into the sticker price like when we buy gas.

I always factor it in: on major purchases (because that’s when it’s a lot of money) and minor ones (because trying to buy something off the dollar menu and then standing there with a blank look on my face upon handing the cashier a dollar isn’t a winning strategy).

Yeah, the problem with the US system is it’s so visible. You actually know the amount you are paying and are aware that it’s a surcharge above the actual purchase price.

In contrast, the UK and European VAT is harder to notice. Governments love taxes that you can’t see or aren’t made aware of. Much better to hide the cruel, hard facts. Why should the taxpayer know what he’s paying, the suckers?

My understanding is that most European VAT’s are set at a national rate. Here in the United States, sales taxes are set by states, counties, and municipalities - the different levels of tax in effect would make it complicated to set it in with the price. And merchants would oppose it because businesses in higher taxed areas would have higher sticker prices and be less competitive even though they were not collecting the additional money being charged.

Another difference is the VAT rates are much higher than sales tax rates. The United Kingdom’s VAT is 20%.

The flat-tax debate is always just under the surface, waiting to read its ugly head. Amateur Barbarian is right, it’s a (invariably heated) debate that doesn’t need to be in this thread. He’s also correct in suggesting that one should study the impacts of flat and/or regressive taxes before spouting off on the virtues of same.

However, I think I can say one thing about it without raising too much debate (although I don’t have any actual figures to cite – can someone help with that?):

State sales taxes, in the various states and localities, vary from 0% to 9.something% or so. Some people seem to think these are tolerable levels. So far, so good. And some people suggest that we should eliminate income taxes and switch to a flat-rate nationwide sales tax, essentially what others call a VAT tax.

I suspect these proponents of flat-rate nationwide sales tax haven’t done the arithmetic. Nationwide, our Federal income taxes vary widely, but overall I think it’s well over 10% on the whole. (Anyone able to give an accurate figure?) Thus, if income tax were to be replaced by a sales tax, that sales tax would have to be well over 10% in order to generate the same revenue. Little Nemo, above, points out that British VAT is 20%.

I think Americans who support nationwide sales tax have never stopped to think about that. Such a tax would necessarily be way more than the state sales taxes we are accustomed to. You’re all going to be in for one hella sticker shock when that happens!

And yes, a flat sales tax, which taxes consumption (your purchases) rather than income, is considered a regressive tax by those who know that they’re talking about, because it falls harder on people with lower incomes rather than harder on people with higher incomes. We can leave it to a Great Debates thread, should one wish to start one, to argue whether that is a good idea.

What irritates me is that sales tax in the us is a minimum. Stores can charge as much as they want over it. 4% is mandated by the state, but its not uncommon to see stores changing more than 4.5%.

I’m pretty sure that’s not legal. I know that some counties/cities have additional sales tax over the state amount, so maybe you’re seeing that depending on where you’re shopping, and certain items may have “sin taxes” added on (alcohol, tobacco, gas, soda, etc.).

In what state is that legal? Not in mine. Are you sure you’re not confusing local (county or other districts) add-on taxes with merchant add-ons? In my area, the Green Bay Packers were able to force a half-cent (I think) additional sales tax just so we non-sports fans could be forced to build them a stadium that they sorely needed. :rolleyes:

The last increase is just fucking stupid. It was supposed to increase revenue for the government, but has lowered it instead:

  • 40% of employed people are self-employed (old stat, it’s likely to be different now but still in the ballpark). These people can deduct VAT on any business-related purchase. Many people who didn’t bother track VAT on every little purchase when it was 16% do bother when it’s above the mental 20% barrier, as it is now.
  • People who carry double accounting have shifted more of it to the “black” side.

Not a bloody good idea, having it at 21%. It’s one of those things that make me wonder what planet do they live on.

“Always conscious of it,” but that doesn’t mean I know off the top of my head what my total will be when reaching the register. I live close to a county border in central Indiana, and there are local taxes that may be added depending on which side I’m on (and, unlike the state rate of 7%, I honestly don’t know what the various city or county rates might be). As well, food (at least, non-prepared food) and various other products are tax exempt; if I’m shopping at a supercenter, I usually have a mix of taxed and tax-exempt products, and I don’t keep separate running totals in my head.

The food tax is also applied in a vague manner, and I’ve noticed that the same products (often something in a gray area, like flavored crackers that could be snack or shelf-stable foodstuff, or a prepared sandwich that may or may not be heated before consumption) are charged tax or not depending on how a given store or chain has classified the product in their systems.

Uh, no. That’s fraud. You’re probably seeing a county or city tax being added in.

Here in MD the tax rate is low enough that it doesn’t really start to come into my consciousness until I’m buying something pretty expensive. Maybe $100.

In Quebec, though, we’re looking at about 15%, which is high enough to notice on the littlest things. I’m always conscious that my $1 pack of gum will cost $1.15.