More businesses ought to ‘tax-plain’ themselves
Call it a “tax-planation” — spelling out for your customers why the government has forced you to increase what you charge them. From a Wall Street Journal article:
In New York, the sale of whole bagels isn’t subject to sales tax. But the tax does apply to “sliced or prepared bagels (with cream cheese or other toppings),” according to the state Department of Taxation and Finance. And if the bagel is eaten in the store, even if it’s never been touched by a knife, it’s also taxed.
That was news to one New York bagel-store owner, who found out he was out of compliance with the policy this summer when the state audited his company.
Kenneth Greene, the owner of 33 Bruegger’s Bagel franchises throughout New York, says the state demanded that he start charging taxes on all bagels, except for those that remain intact and are consumed off premises, and forced him to pay a “significant” sum in taxes that the state estimated he owed.
Mr. Greene says the extra charge, about eight cents a bagel, depending on the local rate, filled his customers with boiling rage. “They felt we were nickel-and-diming them. They thought we were charging them to slice a bagel,” he said.
To clear things up, he posted signs at the cashier informing customers that it was Albany, not Bruegger’s, to blame. “We apologize for this change and share in your frustration on this additional tax,” the signs read.
When I lived in Europe, I always felt that one of the only reasons governments there could get away with value-added taxes (VATs) of 20 percent or more on retail purchases was that the tax was — by law, as I understand it — baked into the price listed on the price tag. When I moved back, it was jarring at first to have 8 percent tacked onto the price of a good at the cash register, even though I knew the sales tax in Atlanta was smaller than the VAT I was charged in Brussels.
Government imposes all sorts of direct and indirect taxes that are passed on almost invisibly to the price of goods. For example, requirements that certain waste doesn’t go into a landfill may result in a “disposal fee” buried in the fine print of your bill for a certain repair or installation service.
We’d be a lot more aware of how much “nickel-and-diming” government does to us every day if more businesses would follow Kenneth Greene’s example.
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87 comments Add your comment
Horrible Horace
August 24th, 2010
3:11 pm
Horrible Horace
August 24th, 2010
2:16 pm
Along with Tim Geither and Larry Summers who Greenspans cronies and now on The Imam Obamas economics advisory team…LOL.
Obama is stupid.
CJ
August 24th, 2010
3:13 pm
I’m still not clear on how liberals can reasonably be labeled as both socialists and fascists, two schools of thought (to put it kindly) on opposite ends of the political spectrum. But again, freedom of b.s. and all that.
I have to admit that I enjoyed the irony of seeing the word “genius” misspelled when, essentially, accusing somebody of stupidity.
Overtaxed
August 24th, 2010
3:28 pm
How about Nazi’s? I’m quite sure they were socialists, and they were only a stone’s throw from being Facists. I’ll argue that Facism and Socialism are far closer together (and on the SAME side of the political spectrum) all day.
Read Liberal Facism. Its a little too “textbook boring” for my tastes, but still an interesting read.
left wing
August 24th, 2010
3:35 pm
Overtaxed The name Nazi may stand for National Socialists, but then again Kim Jung Il says they’re the Democratic Peoples Republic of North Korea. There’s no truth in labeling.
I suggest you do some independent research, and stay away from political hacks like Johah Goldberg. Try and find something independently written and you’ll find that Facism is a right wing ideology who demogogue that anyone that disagrees with them are socialists and loves the concept of merging corporations with government, kinda like . . . . whoops, sorry. Didn’t mean to label you.
Overtaxed
August 24th, 2010
3:42 pm
I know what the problem is. We need parents to better educate their children in Math and Economics. You can’t make this stuff up:
By DANIEL B. KLEIN (Wall Street Journal, 06/08/2010)
Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.
Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents’ (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.
Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.
Consider one of the economic propositions in the December 2008 poll: “Restrictions on housing development make housing less affordable.” People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.
Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.
Therefore, we counted as incorrect responses of “somewhat disagree” and “strongly disagree.” This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer “not sure,” which we do not count as incorrect.
In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.
The other questions were: 1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).
How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.
Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.
To be sure, none of the eight questions specifically challenge the political sensibilities of conservatives and libertarians. Still, not all of the eight questions are tied directly to left-wing concerns about inequality and redistribution. In particular, the questions about mandatory licensing, the standard of living, the definition of monopoly, and free trade do not specifically challenge leftist sensibilities.
Yet on every question the left did much worse. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%).
The survey also asked about party affiliation. Those responding Democratic averaged 4.59 incorrect answers. Republicans averaged 1.61 incorrect, and Libertarians 1.26 incorrect.
Adam Smith described political economy as “a branch of the science of a statesman or legislator.” Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.
Mr. Klein is a professor of economics at George Mason University. This op-ed is based on an article published in the May 2010 issue of the journal he edits, Econ Journal Watch, a project sponsored by the American Institute for Economic Research. The article is at: http://econjwatch.org/articles/economic-enlightenment-in-relation-to-college-going-ideology-and-other-variables-a-zogby-survey-of-americans
CJ
August 24th, 2010
3:51 pm
“I’ll argue that Facism [sic] and Socialism are far closer together (and on the SAME side of the political spectrum) all day.”
When you’re finished reading “Liberal Fascism”, Overtaxed, might also enjoy these other Johah Goldberg titles: “The Flat Earth Society Handbook”, “Tomatoes are Vegetables and Other Politically Incorrect Truths”, “The Darwin Hoax”, and my personal favorite, “My S*#* Doesn’t Stink”.
Overtaxed
August 24th, 2010
3:53 pm
The fact that you question whether or not Nazi’s were Socialists sums it up for me, and explains why you also can’t understand the concept that taxation hurts economic growth, and that government isn’t the solution to the vast majority of our problems.
left wing
August 24th, 2010
4:00 pm
Guess we’ll just have to settle for being smarter:
(just the 1st paragraph)ScienceDaily (Feb. 24, 2010) — More intelligent people are statistically significantly more likely to exhibit social values and religious and political preferences that are novel to the human species in evolutionary history. Specifically, liberalism and atheism, and for men (but not women), preference for sexual exclusivity correlate with higher intelligence, a new study finds.
http://www.sciencedaily.com/releases/2010/02/100224132655.htm
Overtaxed
August 24th, 2010
4:15 pm
We have a rebuttal readily available for that sceiencedaily article. Just read through most of these blogs and comments. And then try and conclude that Liberals are smarter.
CJ: how has my spelling been lately? Any typos to speak of? How about grammar? Any hanging chads?
Only a liberal can argue that we’ll all be better off if A) we all work…or at least those that feel like it, and then we B) give a significant portion of our earnings to the governement, then C) they will take care of any needs we haven’t met on our own, using our tax money they took, and D) they’ll take care of any of the folks that couldn’t or didn’t work. I can’t see how there could be any flaw in that plan. None at all.
CJ
August 24th, 2010
4:16 pm
Overtaxed: “You can’t make this stuff up…”
I was just looking at that asinine Daniel P. Klein study, and it turns out that it’s Klein’s answers that deserve scrutiny, not the liberals’ responses—
Klein’s survey, for example, asserts or implies that third world workers working for American companies overseas are generally not exploited, that free trade generally leads to higher employment, and that minimum wage laws generally always increase unemployment. Insisting that arguable, reasonable, or correct answers are wrong is a novel way to demonstrate that a certain class of citizens are uneducated. But then again, that’s the Wall Street Journal for you.
Overtaxed
August 24th, 2010
4:16 pm
Question: What’s the definition of a liberal genius?
Answer: A liberal who can count all 50 states.
Overtaxed
August 24th, 2010
4:16 pm
Question: How do you confuse a liberal?
Answer: You don’t, they are born that way.
Overtaxed
August 24th, 2010
4:17 pm
Q:How many liberals does it take to change a light bulb?
A:None. Liberals wouldn’t actually change the light bulb, but they would show compassion for it by talking a lot about how terrible it is in the dark and more funding is needed to improve dim, 60 watt bulbs up to bright and productive 100 watt bulbs.
left wing
August 24th, 2010
4:24 pm
Overtaxed You posted an article from the really right wing WSJ about a poll featuring very right wing oriented questions, and you expect me to take it seriously? I was LMAO at you.
Some of the questions, like the one about rent control, are highly subjective (it’s a chicken-or-the-egg-thing). The rest are so biased that I queston why anyone would take it seriously.
I tried to take the high road and post something light. I should have realized that conservatives have no sense of humor.
Overtaxed
August 24th, 2010
4:25 pm
CJ: See my 2nd joke. And please, puh-leeze! produce one economist that can argue with a straight face that minimum wage laws don’t produce higher unemployment.
p.s. Daniel B. Klein is a professor of economics at George Mason University and an Associate Fellow of the Swedish Ratio Institute.
Klein received his doctorate in economics from New York University in 1990. I’m sure he’s wrong though. He just needs to consult CJ down here in Atlanta. Look for him on one of those Bookman or Tucker blogs.
Overtaxed
August 24th, 2010
4:26 pm
http://www.econlib.org/library/Enc/MinimumWages.html
Here you go CJ. Put down the playstation and cheetos and go read.
left wing
August 24th, 2010
4:28 pm
Overtaxed We’ve had a period of the 3 things conservatives like you abhor; relatively high marginal tax rates, relatively high minimum wage and strong labor unions. They were perhaps the longest, strongest period of economic growth in this country. I’m talking about the period from 1947-1963.
CJ
August 24th, 2010
4:39 pm
Great stuff, Overtaxed. Even I had to laugh. I especially liked the one about liberal compassion. We sure know how to take it to extremes.
Speaking of extreme compassion, I have to leave now to attend my Nazi Party meeting–always an opportunity to have a good collective cry on behalf of the less fortunate (save, of course, the Jews, Africans, homosexuals, mentally disabled, physically disabled,…)
Linda
August 24th, 2010
4:45 pm
HDB @ 1:25, According to the Dept. of Energy in 2006, the US had proved oil reserves of 21.9 B barrels. New oil recovery using CO2 could add 89 B barrels to recoverable oil resources in the US, which would give us the 5th largest oil reserves in the world (119.9 B barrels). (Iraq has 115 B.)
The DOE also found that “multiple advances in technology & widespread sequestration of industrial carbon dioxide could eventually add as much as 430 B new barrels to the technically recoverable resource.”
Adding this other 430 B barrels to our 21.9 would made the US the largest oil-producing country in the world!!! (Saudi Arabia has 261 B barrels.).
http://www.fossil.energy.gov/programs/oilgas/eor/index.html
http://www.fossil.energy.gov/news/techlines/2006/06015-Oil_Recovery_Assessments_Released.html
We will never run out of oil!
josef nix
August 24th, 2010
5:09 pm
I just wanted to check in with our host during our exile from Jay’s. I’m afraid this is a topic that I really don’t know enough about to comment on.
Port O'John
August 24th, 2010
5:09 pm
Nice work Kyle. More left vrs. right name calling.
Partisanship is an IQ test, if you believe that either the GOP, Libertarian or Democractic parties care about anything except getting power, you failed the IQ test.
BADA BING
August 24th, 2010
5:11 pm
Over taxed……How many White men does it take to change a light bulb……..A. One.
BADA BING
August 24th, 2010
5:12 pm
Why did God make White people?…….A. Someone has to pay retail.
Intown
August 24th, 2010
5:23 pm
I always hear the VAT mentioned when misguided conservatives argue for the “flat tax” here in America. Here it is criticized. I dunno what to think except that Kyle hates muslims.
josef nix
August 24th, 2010
5:28 pm
BADA BING
That’s why did G-d create goyim!
BADA BING
August 24th, 2010
6:05 pm
josef….I could not use goyim, I didn’t even know how to spell it.
Streetracer
August 24th, 2010
6:24 pm
I know that I’m kind of late to this whole thing, but a few points.
Left wing:
1). Your analysis of the effect of a VAT is wrong simply because the money Governments spend already comes out of the economy. Changing to a VAT may effect individuals, but not the overall economy.
2). The problem with allowing intellectuals to define intelligence is that they define it to include themselves, and exclude those they don’t agree with.
3). I would venture to say that the economic exuberance of 47 to 63 was the result of the depression of the 30’s and WWII in spite of high taxes etc.
To those of you who think NAZI doesn’t mean “Socialist”, compare what Obama says with some of Hitler”s early speeches. Except for the “Nationalism” I don’t see much difference. In both cases the primary message is “you can’t take care of yourself, so you should elect me so I can make sure the government “meaning me” takes care of you”.
saywhat?
August 24th, 2010
6:47 pm
overtaxed- Q:How many Republicans does it take to screw in a light bulb?
A: None. Republicans screw in men’s public restrooms.
Linda
August 24th, 2010
8:08 pm
saywhat @ 6:47, You are hurting your party.
md
August 24th, 2010
10:01 pm
Reading through this blog, it is apparent that some folks do not understand the WE are the corporations, and WE want them to do well, or WE all suffer.
“Gov’t” creates zero wealth……………..
Michael
August 24th, 2010
10:13 pm
I’d love to see this as well. Despite being opposed to something like the FairTax, I’m all for tax simplification. I really don’t get why now that I own a home I get credit for that on my income tax return. Wouldn’t people who couldn’t afford a home need a tax break more than people who can?
I also am REALLY opposed to localities offering tax breaks to big companies to locate in the vicinity. Again, why should some really big company get a tax break for moving in but a little bagel shop doesn’t get this treatment? It’s not the small biz owner’s fault that he isn’t the size of Kia.
I’ve got a relative who is buying land and thinking of putting a cow or something on it so he can consider it a farm for tax purposes. I know plenty of people who write off stuff for business even though it’s loosely business-related. We need to end this game of people finding loopholes in the system and simplify our tax laws. We can have a few different income tax brackets, a deduction for children, and keep sales taxes with one rate for food, another for other items. Imagine how much money people would save by not needing $60 tax software or accountants.
md
August 24th, 2010
10:59 pm
“I also am REALLY opposed to localities offering tax breaks to big companies to locate in the vicinity.”
So, is it better for the jobs generated to go elsewhere?? Mom and pop bagel won’t employ near as many as “kia”, it’s about economic impact, not favoritism.
TjAtl
August 25th, 2010
12:27 am
This is really, really easy, people: I am a manufacturer. I buy materials at wholesale price and don’t pay sales tax because I’m using it to make something. I make the product, then sell it to a retail store who also doesn’t pay sales tax. They charge sales tax to the final customer. If I happen to sell my own finished product to an end user, I have to collect sales tax and pay it to the jurisdiction having authority.
Someone must have had to define at what point the sale of a bagel ceases to be wholesale and becomes retail, and therefore subject to sales tax.
I fail to understand what is so newsworthy about this.
No More Progressives!
August 25th, 2010
6:45 am
left wing
August 24th, 2010
11:19 am
However, the “fair tax” is a really bad idea, and here’s why:
It’s disturbing that you would decry the Fair Tax without having read Boortz’s book on the subject, which is obvious.
It’s even more disturbing that you would argue that the fair tax can’t work, therefore we must keep the IRS and the incomprehendable 70,000 pages of tax code, simply because you say so.
The IRS’ own data show that about 50% of W-2 wage earners in this country don’t pay federal income taxes. The current code penalizes success (I know that upper income earners just infuriate the left).
Conversely, a huge share of the federal burden is borne by the upper 15% (or so) of wage earners. And the left is all about fair? Methinks not.
If the fair tax won’t work, as you claim, how do Florida and Texas survive?
Consumption (sales) tax, that’s how.
No More Progressives!
August 25th, 2010
6:50 am
To those of you who think NAZI doesn’t mean “Socialist”,
Good point, Streetracer.
Nazi is a contraction of Nationalsozialistische Deutsche Arbeiterpartei, the National Socialist German Workers’ Party.
Horrible Horace
August 25th, 2010
8:11 am
Agreed FairTax is an bad idea and it will not be fair. Would rather stick with the Devil I know.
VAT…? Forget that also.
No More Progressives!
August 25th, 2010
10:24 am
The only “fair” federal income tax would be
1) a one-page 1040 for everyone;
2) take you gross W2 earnings;
3) times a percentage (say, 10%).
No deductions, exemptions, loop-holes or other falderal.
You either overpayed or underpaid.
Simple. And fair.