ShmoopTube

Where Monty Python meets your 10th grade teacher.

Search Thousands of Shmoop Videos


Banking Videos 367 videos

Finance: What is Collateralized Mortgage Obligation (CMO)?
65 Views

What is Collateralized Mortgage Obligation (CMO)? A CMO is a mortgage bond that consists of a large number of different individual mortgages bundle...

Finance: What are Secured Bonds v Unsecured Bonds, and what is Non-Recourse Debt: Debentures (Subordinated and Senior)?
68 Views

When a bond is secured, it means it's protected, i.e. there are assets that would be forfeited if repayment is not made. When it's unsecured... it'...

Finance: What is Counterparty Risk?
9 Views

What is Counterparty Risk? Counterparty risk is the risk to either party within a transaction that the other will not or be unable to abide by the...

See All

Finance: What is sales tax? 67 Views


Share It!


Description:

What is sales tax? Sales tax is one of the few taxes that are only assessed at the state level. It is charged at the point of sale of either a retail service or product to the end user and collected by the vendor for remittance to the state.

Language:
English Language

Transcript

00:00

finance a la shmoop. what is sales tax? and what are progressive and regressive

00:06

taxes? thumb tacks horse tax sales tax. all right well sales tax is yet another

00:13

way the government collects money to spend on things they need to you know [money in a vault]

00:17

govern us. so if you buy an acme chihuahua launcher in california while

00:21

you pay eight percent sales tax on it. meaning you thought you were only

00:26

spending a hundred bucks and it turns out that the launcher well really cost

00:30

you 108 dollars, and then you could tack on whatever damage the chihuahua does.

00:34

all right well each state has different sales tax charges. some states are high,

00:39

some states are low. but sales tax is considered regressive. which sounds like

00:45

a bad word and it while kind of is intended to be bad sounding. why? well

00:49

because everyone pays the same tax rate whether they're a hard-working plumbing

00:55

supply parts vendor making 200 grand a year, or a lazy bridge Tollbooth taker [pipe maker's logo]

01:00

who loves keeping their Facebook pages up-to-date. they pay the same rate when

01:04

either one of them buys a two-in-one laminating toaster, oven they pay the

01:09

same sales tax rate on that oven, and that is called regressive. the thought

01:14

process that being well 8% taxes on 200 grand in earnings a year is a whole lot

01:20

easier to pay than 8% taxed for someone earning only 20 grand a year. and yes

01:25

politicians want to punish the hard-working, saddle them with more

01:29

burden so that the less financially beefy, can you know keep their facebook

01:34

pages very up to date. well the opposite of regressive is the positive sounding

01:38

progressive tax system, where the hard-working plumbing supply parts dude

01:43

pays meaningfully more in tax and tax rate than the Tollbooth cash taker with [man frowns behind a desk]

01:49

the really up-to-date Facebook pages. of course that cash taker didn't study in

01:53

school didn't work hard early or later in life and now lives in a cockroach

01:57

infested apartment while the plumbing supply vendor is about to purchase his

02:01

second home, so maybe there is something after all to that education thing. like

02:06

kids study in school or you like that guy all right. well is

02:10

progressive tax good and regressive tax bad? maybe maybe not who knows not for

02:16

shmoop to say, all we know is that progressive and regressive taxation both

02:21

live in American society and they're the one-two punch that the friendly IRS man

02:25

uses to well you know knock you out. [man in suit throws a punch]

Related Videos

GED Social Studies 1.1 Civics and Government
39794 Views

GED Social Studies 1.1 Civics and Government

Fake News
11938 Views

How do you tell fake news from real news?

Finance: What is Bankruptcy?
260 Views

What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...

Finance: What is a Dividend?
1777 Views

What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...

Finance: How Are Risks and Rewards Related?
589 Views

How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...