Comrades in the Senate are now debating taxing sodas and sugary drinks, energy drinks, sports drinks and even iced teas like Snapple. Why? To ‘pay’ for the upcoming health-care overhaul. The tax being debate is an excise tax – the kind that is levied onto goods that manufacturers then pass on to customers. No big deal you say? Sugary drinks cause diabetes, obesity, health problems, etc?
Not so fast comrade. Excise taxes are well loved by pols in many European quasi-socialist states. The most insidious part of this kind of taxation? The fact that many products have skewed pricing that hurts consumers. It is also a hidden tax as well – the consumer doesn’t write a check to the IRS for instance and in most cases doesn’t know that he is funding excessive taxation.
Take the liberal bastion of the Netherlands for instance. A beautiful, clean society that progressives drool over. “America needs to be just like the Netherlands, they have free health-care, low-crime, great schools, ….”
Case in point, the gasoline price in Dutchland? Consider an imported price of $3/gallon. Ok, that sounds close to what our gas prices are here, right? Not so fast. Once it is imported the Dutch government slaps a $3.50/gallon excise tax regardless of price. So consider then that the $3/gallon import price suddenly becomes $6.50/gallon on the street. But that’s not enough. Dutch pols then get another 19% VAT (value added tax) on top of the total price. In this case that would be $1.23. Total street level gas price? $7.73.
The Obamanations, progressives and various Statists in America think that we need to be more like Europe. In truth, we need to be the exact opposite of Europe. Always oppose hidden taxes like the excise tax – these are the tools of Statists that want to pull the wool over the public’s eyes. Remember too that our founders fled Europe because of excessive taxation and Statism. A truth that today’s youth have long forgotten……
6 comments:
Another great post. The term in public finance is tax incedence. Who pays those hidden taxes. The answer is nearly always the labor force or consumer. Excise taxes are usually the most wasteful tax of all taxes according to economists, because it’s a nice little surprise at the register.
CG – Great point, I’ll keep in mind the actual term for hidden taxes. Can you believe the pace that these guys are marching the US to a Euro Socialist state?
No, Idon’t believe what Obama’s getting Away with. Cap and trade and health care are pretty big commitments
CG – Cap and Trade and health care will transform our economy permanently, in a way that dwarfs medicare and Social Security. And yet there is almost no debate on this.
Thomas Jefferson believed that if the gov taxes your income, then the gov should not be allowed to tax anything that you do with your income. I agree with the esteemed Mr. Jefferson. We’ve had taxation upon taxation for so long now that it is considered normal.
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