A guy on sports message board that I frequent explains that sales tax are voluntary. His argument is that you must choose to purchase goods/services, and if you do then you agree to the sales tax. Therefore it is a voluntary tax.
My reply:
This is a ridiculous statement. All taxes are coercive by their very nature. If businesses do not pay their taxes they are threatened with violence in the form of fees, jail time, or being shut down completely. So it’s not exactly voluntary for them is it?
To say that any tax – federal income, state/local sales, etc – is voluntary is outrageous.
I don’t know much about your background, but I’m guessing that a name like “political hack” and a picture of the capitol building means you are part of the ruling elite class in Washington so naturally you would be an advocate of taxes.
Slaveowner: “You have chosen to run away. You knew that you would be punished for trying to run away. Hence, you will be punished by your own free choice. I can whip you or drag you behind a horse. Your choice. You chose to be punished and now you will choose what sort of punishment it will be. I don’t believe in forcing people to do things they don’t want to do, so I want to be sure you are punished voluntarily and in the way you choose to be punished.”
That is the medical definition of voluntary. If I hit your knee with a hammer and your leg pops up, involuntary. If I ask you to raise your leg and you raise it, voluntary.
What I find more interesting about the so-called “sales” tax is that it is not a tax on sales, at all. It is a consumption tax. Businesses make YOU pay it. If it’s a sales tax, that means they are forcing you to pay their taxes if you want their services.
It’s really a consumption tax that goes directly to the consumer.
A business could just say “cost; $5.06.” But they don’t. It’s “$4.99 + tax.” THEY are not paying the tax, the consumer is. And the business makes no bones about the fact that THEY are not, in fact, paying the tax. It is, as any kind of sales tax would be, a tax on the consumer.
I’m sure I could put this in rightist rhetoric and you would understand it better… something about “shifting the burden onto the consumer” or something like that.
The seller pays the sales tax. End of story. The consumer pays higher prices as increased marginal costs raise the profitable price floor. As for price labelling, see the tax code.
The consumer pays higher prices as increased marginal costs raise the profitable price floor.
That’s really the same thing.
From the California BoE:
Can I collect sales tax from my customer?
Yes. Although you are required to pay and report sales taxes to the Board, you may be reimbursed by your customer for the amount of tax you owe on a sale. For example, if you are required to pay $1.75 in sales tax on a sale, you may pass that cost on to your customer, provided it is agreed to as part of the sale. It is presumed that the customer agrees to pay the addition of the tax if:
You list a separate amount of sales tax reimbursement on your receipts or invoices;
You post a sign on your premises stating that sales tax reimbursement will be added to all prices of taxable merchandise, or make a similar statement on price tags, advertising material, and other printed material directed to the purchaser; or
The sales agreement specifically calls for the addition of sales tax reimbursement.
If you include sales tax reimbursement in your prices, rather than itemizing it separately on your invoices or receipts, you must inform the buyer that tax is included. You can post this information at your premises in a location that is visible to purchasers; or you can include it on a price tag or in an advertisement (whichever is applicable). Use one of the following statements:
All prices of taxable items include sales tax reimbursement computed to the nearest mill; or
The price of this item includes sales tax reimbursement computed to the nearest mill.
The government forces you to pay the tax, not businesses, and consumption taxes reduce QD and therefore profits. Taxes hurt both producers and consumers. Do you understand?
If you mean that the consumer is hurt by the sales tax, then you are right. But that’s not the same thing as saying that the incidence of taxation fall on consumers. It doesn’t. It falls directly on all wage earners since the added cost per sale decreases their marginal value productivity. As for consumers, they are injured indirectly only on account that the lower productivity (less goods) results in higher prices for those things the consumers most urgently want. The thing about taxation is that this incidence on wage earners is not uniform, and some wage earners can even gain if they are the recipients of the government spending resulting from those taxes.
As for the businessman, he also is hurt as a consumer, and whether he is hurt as a wage earner depends on his line of business and how government spends the proceeds. As for profits, they are not affected in the aggregate . Profits arise only on account of successful speculative action. Taxes on sales affect profits only initially when they are introduced disarranging the current share of total profits in the system. Some will gain and others will loose.
Describing raising prices to offset costs as tax collection is equivocation. A bank is a tax collector because interest rates are higher than they would be without monetary policy. A factory worker is a tax collector because wages are higher than they would be without payroll tax. Everyone is a tax collector in the idiotic bureaucrat language.
The government forces you to pay the tax, not businesses, and consumption taxes reduce QD and therefore profits. Taxes hurt both producers and consumers. Do you understand?
The government forces the business to pay the tax. So the business forces its consumers to pay it for them. I never said the tax was helping the business owner. Did you notice you just called it a consumption tax?
Once again, see the quote from Cali I provided: “can I make my customers pay the tax?” “Yes but you must tell them they are paying the tax.” It is a tax on consumption, levied on the merchant for ease of collection (otherwise they would make you save all of your receipts for them to go over at the end of the year. And they know that would never fly, nor would they want to do that much work)
If you mean that the consumer is hurt by the sales tax, then you are right. … It falls directly on all wage earners since the added cost per sale decreases their marginal value productivity.
Correct. This is basically what I was saying. I guess I just don’t phrase myself well, around here.
“Those who claim that taxation is, in some mystical sense, really “voluntary” should then have no qualms about getting rid of that vital feature of the law which says that failure to pay one’s taxes is criminal and subject to appropriate penalty. But does anyone seriously believe that if the payment of taxation were really made voluntary, say in the sense of contributing to the American Cancer Society, that any appreciable revenue would find itself into the coffers of government? Then why don’t we try it as an experiment for a few years, or a few decades, and find out?”
“The idea that taxation is voluntary seems to be endemic among economists and social scientists, though hardly so among the general public. [19] But if an individual refuses to pay his assigned tax, coercion will be wielded against him, and if he resists the confiscation of his property he will be shot or jailed. Failure to pay taxes subjects one to civil and criminal penalties. There should be little need to pursue the matter beyond this, were not economists determined to deny this patently obvious fact.”
The business owners are the ones that pay the tax. They just pass the cost on to their customers. So ask him if it is voluntary for the business owners to pay it.
The business owners are the ones that pay the tax. They just pass the cost on to their customers. So ask him if it is voluntary for the business owners to pay it.
Well the buisness owners obviously are deciding VOLUNTARILY to sell stuff to people…huurrrrrrrrrr…
Actually, there’s a range over which the burden of a sales tax (or VAT) is shared between the buyer and the seller. On one extreme, sellers may see the entire burden of the tax come out of their profits. On the other extreme, buyers may find the entire burden of the tax falling on their shoulders. Most of the time, the real-world effect lies somewhere between these extremes. It all depends on the relative elasticity of supply and demand for the good in question.
If you have a registered business you do not pay the VAT on goods that you buy. If you pay the full price you can claim that VAT back from the government or in some cases you do not even need to pay the full price, just keep a record of the transaction. Every registered business has to pay tax on their sales. They pass that on to the consumer in the form of a higher price. In some cases if the VAT is increased the business can choose to not increase the price and take the VAT increase as a reduction in profit. But usually when there is a VAT increase businesses increase the price so they do not pay the sales tax.
There is a different theory that people have said that there is no actual law that says you have to pay income tax and that the law is invalid and they have written books about this. They say that paying taxation is voluntary and then they say that they have read the income tax code all 22000 pages and can not find any evidence that you have to actually pay income tax. For example Sherry Peel Jackson:
Any tax not paid which jeopardizes life, liberty or property is a tax that is not voluntary, but mandatory. One cannot buy the necessities for life without paying a sales tax. Therefore, the sales tax jeopardizes life and is coercive by its nature. That one will pay the tax in order to preserve life does not make the tax any less coercive or make it voluntary.
