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On taxes, hidden and overt
Apr. 15th, 2013 03:34 pmI've often heard it said that "No one likes a hidden tax." But is that really true? And just what do we mean by "hidden", anyway?
When it comes to sales tax, we have this notion here that the price tag should generally indicate the BEFORE-tax price. It's totally opposite to the practice in most European countries I've visited, where the price on the sticker is the price you actually PAY. And then, if you've spent enough money in one place, you can sometimes even apply afterwards for a refund of the portion of your purchase that was tax. I wonder how many tourists in Canada have been caught unawares, thinking they had enough money with them only to find they had to pay 13% extra once they got to the checkout. Not very good for the tourism business, I shouldn't imagine.
Bizarrely, when it comes to things that are HEAVILY taxed in Canada - alcohol, for example - the sticker price IS what you pay at the till. Is that because they figure no one would buy alcohol at all, and the government would lose all that revenue from "sin tax", if we actually KNEW or had to THINK ABOUT what proportion of our purchase was tax? And really, the final price of a product you find on the store shelves is still pretty opaque, even when tax is added by the cashier. Do you know by heart the list of the products that are tax-free (or in government lingo, taxed at 0%), those that have provincial tax only, federal tax only, and so on? It seems to me that particularly now that we are doing away with the penny (and can the nickel and dime be far behind?), it would make MUCH more sense to have tax rolled into the price of the product so that we could pay a nice round sum at the cash register! And I don't see that the tax would be much more "hidden" than it is now.
Then there's income tax. We may SAY we don't like hidden taxes but then, if the government hasn't taken away enough at source, grumble because we actually have to pay more at tax-time! There are a lot of folks out there who would prefer to give the government an interest-free loan for the year if it means an illusory windfall in May or June. Ditto for property taxes - some people just can't deal with two biggish payments coming due in March and June so instead, they roll taxes into mortgage payments, providing a sometimes sizable but largely invisible windfall for the lender. Sadly, it tends to be the very people who can least afford these interest-free loans to government who get caught up in them in the first place.
Is government the ultimate payday loan company?
When it comes to sales tax, we have this notion here that the price tag should generally indicate the BEFORE-tax price. It's totally opposite to the practice in most European countries I've visited, where the price on the sticker is the price you actually PAY. And then, if you've spent enough money in one place, you can sometimes even apply afterwards for a refund of the portion of your purchase that was tax. I wonder how many tourists in Canada have been caught unawares, thinking they had enough money with them only to find they had to pay 13% extra once they got to the checkout. Not very good for the tourism business, I shouldn't imagine.
Bizarrely, when it comes to things that are HEAVILY taxed in Canada - alcohol, for example - the sticker price IS what you pay at the till. Is that because they figure no one would buy alcohol at all, and the government would lose all that revenue from "sin tax", if we actually KNEW or had to THINK ABOUT what proportion of our purchase was tax? And really, the final price of a product you find on the store shelves is still pretty opaque, even when tax is added by the cashier. Do you know by heart the list of the products that are tax-free (or in government lingo, taxed at 0%), those that have provincial tax only, federal tax only, and so on? It seems to me that particularly now that we are doing away with the penny (and can the nickel and dime be far behind?), it would make MUCH more sense to have tax rolled into the price of the product so that we could pay a nice round sum at the cash register! And I don't see that the tax would be much more "hidden" than it is now.
Then there's income tax. We may SAY we don't like hidden taxes but then, if the government hasn't taken away enough at source, grumble because we actually have to pay more at tax-time! There are a lot of folks out there who would prefer to give the government an interest-free loan for the year if it means an illusory windfall in May or June. Ditto for property taxes - some people just can't deal with two biggish payments coming due in March and June so instead, they roll taxes into mortgage payments, providing a sometimes sizable but largely invisible windfall for the lender. Sadly, it tends to be the very people who can least afford these interest-free loans to government who get caught up in them in the first place.
Is government the ultimate payday loan company?
