>>Poor people don't pay tax. Sales taxes are, for example, paid by
>>those who sell things.
>
>Uh, not in the U.S., comrade. You're thinking a value-added tax,
>which is paid by producers and retailers. But sales tax is paid by
>the retail buyer.
That is a fiction. Do the retail buyers forward a percentage of the purchase price to the tax office? If not, they aren't paying tax. The person who actually pays the tax pays the tax.
It is true in a real sense too, the price the consumer of goods and services pay is determined by supply and demand. The retailer cannot, as a general rule, get any more than the market price. Whether or not there is tax included in the price. Neither is it likely the retailer will ask LESS than the market price.
The tax comes out of the profit share in a concrete sense, as well as literally being paid by the vendor. The same applies whether it is a VAT tax or a sales tax, the difference between these two types of taxes is that VAT-like taxes are designed to collect information, as well as revenue.
But when these taxes were recently introduced here in Australia, for example, the extra tax component did not result in a uniform across the board price rises. There were price rises, because the government introduced "compensation" measures, such as increases in welfare benefits, other tax cuts, etc. Which increased nominal income and purchasing power, hence adjusting the "demand" side of the supply and demand equation.
Significantly however, prices did not increase uniformly, as one would expect if the only factor in the increases was the added cost of the GST. Some newly taxed items did not increase at all, for a long time afterwards. Vendors of these things did not dare to increase prices, they had to swallow the cost. Other vendors were able to recoup more than the added tax cost, because they could grab a greater share of the increased purchasing power.
My daughter visited the US a few months ago, she told me all about the bizarre system where many retailers advertise the ex-tax price instead of the actual price. That would be unlawful here, but I doubt it makes much difference, it only fools tourists. The locals would presumably be aware that the advertised price is not the real price and make their purchasing decisions accordingly. (Presumably Americans are not completely stupid and even the tourists would work out the scam very quickly.)
So that American custom of falsely understating the purchase price makes no difference to the reality. the sales tax is paid by vendors, not consumers.
Bill Bartlett Bracknell Tas