>As a business owner I charge $300 for a product. I know how much of
>a margin I need to be profitable and that price reflects that
>reality. The sales tax in 5.65%. I charge that on top of the $300
>making the total $316.95 the customer pays. That $16.95 goes to the
>government. Any retail seller passes all the sales tax on to the
>consumer. At the end of every period whatever the total I collect in
>the way of sales tax is separated from general revenue. I makes no
>difference to me if the sales tax is 1% or 8% I am not benefiting
>from it I am merely collecting it for the state. I am, in essence,
>the temporary tax collector for these funds.
As a business owner you are exceptionally fortunate. It appears you can charge whatever you like, without any fear of repercussions. You are also an exceptionally noble business proprietor, given that you don't take advantage of this position and charge even more. I assume you have a monopoly on an essential service?
>I am ambivalent concerning the sales tax rate until it gets high
>enough to deter a sale. Maybe I am atypical in this regard but when
>meeting with other business owners they have pretty much say similar
>things. I run a small business, just under 3 million in sales so
>maybe for larger stores like Best Buy or Sears a different mind-set
>prevails. If I could eliminate sales tax I would as it is horribly
>unfair. A customer who buys a $200 item may be spending a weeks take
>home pay or just an hours pay depending on their income. They both
>pay $11.30 in sales tax which is almost 6% of of the first persons
>income vs. less than .01% of the others. Nothing even close to fair
>about that. Some retail items may be necessities. A new alternator
>for a car would probably be perceived as a necessity in some areas
>of the country where public transportation is non-existent.
>Groceries are the same way but some areas of the country do not
>charge sales tax on groceries or else charge a lower rate.
>Since the business pays taxes on its operation and income already
>why would they not pass on the sales tax to the consumer as is the
>intention?
Assuming they can charge whatever they like, why not. It seems a rather bold assumption though.
>Payroll taxes are pretty well split with the business paying half
>and the employee paying half.
Except the business also pays the employee's half, on behalf of the employee. The employee never actually gets to touch the money and most employees are practical enough not to ever consider it theirs. If they did get hold of it, they would be unlikely to give it up so easily.
> This of course has nothing to do with sales tax. The sales tax has
>gone up and done over the last few years which is a minor pain but
>it really has no effect on my bottom line. I have no problem paying
>taxes like other business owners I know. Most of them bitch about
>payroll taxes, income taxes and especially property taxes. Property
>tax can effect sales if you are selling trucks and other heavy
>equipment. Other family members in reselling operations complain
>about paying too much in taxes too but sales tax is almost never
>mentioned unless it is going up and there is a fear it will
>adversely effect sales.
How do you reconcile this fear of potential effects on sales with the earlier claim that sales taxes "... really has no effect on my bottom line"? Would not lower prices have a positive effect on sales? If so, it follows that a 5.65% increase in price must at the very least have an effect on sales and thus an effect on the bottom line? Unless you have a monopoly over a product that the customer is forced to buy at any price.
> I have no "shell corporations" with which to hide money and I don't
>move profits and losses around to reduce my taxes. I don't pay
>family members to hold fictitious titles in fictitious companies
>either. I really do not know how they do it but then again I don't
>care to.
Paying people for fictional work would be very bad for the bottom line. Moving profits around to legally avoid tax is theoretically sound though, taxes come off the bottom line and if you have any competitors who avoid tax, you must follow suit. Its the lowest common denominator principle of capitalism.
Bill Bartlett Bracknell Tas