There's about 25% added to prices in order to pay for the income tax and compliance costs of the retailer (and his suppliers)... and consider that each dollar you spend today has already been taxed - payroll tax AND income tax!
So in today's world, assuming a 20% tax on income tax and 7.65% payroll, if you want to consume $1 of goods, you need to earn $1.84!
Don't believe me?
1.84 * .75 = 1.38 (the hidden, embedded tax & compliance cost you don't see)
1.38 * .7235 = $1 (20% + 7.65%)
(approx).
Did you have any idea that the effective tax rate paid by most Americans is so high?... Earn $1.84 to consume $1.00??? This is for ANY good or service!
Under the 23% national retail sales tax, in order to consume $1.00 of goods, the maximum one would need to earn is $1.30. I say "maximum" because necessities are not taxed, and investment of any kind is not taxed. Hence the actual tax rates on individuals would be measurably less than 23%.
I hope you responded as you did because you just weren't aware of how much tax you already pay. Indeed, the major obstacle to fundamental tax reform is the ignorance of the populace in regards to the amount of tax already being paid. They've done a good job keeping it hidden.
Welcome to reality.
Look into this link to find out more.
The Individual Income Tax return(1040) that captures everyone's attention each April, is merely a partial VAT accounting sheet the government cons individuals, held at ransom, into filling out. Its misdirection puts blinders on the eyes of the electorate, and totally distorts their perceptions as to the real impact of taxation in their lives.
Every man woman and child in the nation, pays federal taxes through that VAT.
DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation
The full impact of the federal tax system(taxes in gross wage/salaries & other compensation + business income/payroll taxes) added onto the base(taxfree) price of retail consumption goods and services is 36% for federal taxes alone.
All wages and the taxes on them are paid for out of sales receipts to business,(i.e. consumption expenditure).
Federal tax revenues collected as % of current family expenditure = fed/(1-state-fed-savings) =
23.5/(1-.235-0.102-0.012) = 36.09%
If we add in the cost of federal tax compliance, planning, litigation & enforcement, the percentage that truely represents the burden on the family due to the Federal income/payroll tax system, product prices are increased by more than 55% over taxfree prices.
Where Have All the Dollars Gone?
How the government robs Peter to pay him back.
By economist James L. Payne, Reason Magazine February '94When the overhead costs are added together, (24 percent compliance costs, 33 percent disincentive costs, and 8 percent other costs), they total 65 percent of tax revenue.
Current total Federal tax revenues are about $1900billion, more than $1,000 billion additional dollars are added on onto consumption prices due to the business costs of complying with the federal income/payroll tax laws.
The percent total current federal burden (taxes + compliance costs) of consumption dollars = 36*(1900+1000)/1900 = 54.95% economic burden added on to base retail(i.e. taxfree) prices.
Too bad that citizens don't get a receipt detailing those "hidden sales taxes" buried in their consumption purchases. If they ever did, some of those 70% of the public clamoring for more from government, thinking someone else foots the bill, might be tempted to change their mind.
The NRST(H.R.2525) removes virtually all the overhead cost from the base price of goods and services, and makes the Federal Tax open to the full view to the Voter while maintaning the revenue neutrality necessary for enactment.
Here is a link to an echo of the same dataset, elsewhere on the net.
"Federal taxes 23.5%(taxfoundation)
State & local taxes 10.2%(taxfoundation)
Hope the tax foundation puts their (1900 to current) historical data back on line sometime, its a good resource for keeping track of things.