Quote:
Originally Posted by editeur
The problem with sales taxes is that the state becomes interested in higher prices. The higher price, the more taxes got paid, if you lower price you reduce state revenue. With taxes on profit it works slightly different, as the profits and taxes can be increased by cost reduction through, for example, innovations.
It does not mean the govt will actively push retailers to raise the prices, but one way or anoither it will affect the policies of the state.
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the problem is already that it is a state thing
mostly everywhere else the sales tax (VAT) is handled on federal level, 1 rate all over the country, included in the prices already so you don't even notice you are paying it
also mostly everywhere you have at least 2 rates - a low one for basic things like food, books etc and a higher one for the rest
and in case it's a business expense, you get the VAT reimbursed
makes sense to me in general