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Finance: What is sales tax? 67 Views
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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.
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- Finance / Finance Definitions
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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
Full Transcript
- 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]
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