Plan to buy fudge? You will pay a sales tax in New York. Chocolate for baking? No tax. Potato chips and plain nuts are also tax-free but not honey-roasted nuts.
Other tax decisions? According to the WSJ, in the U.K., for example, as of April, 2010, “dog food for ‘sheepdog breeds’ is taxed, but dog food for ‘working sheep dogs of any breed’ is not; food for greyhounds is taxed, food for ‘racing greyhounds’ is not.”
And, in the U.K., sailors’ lifejackets are taxed because they are defined as adult clothing but “buoyancy aids” are not taxed.
The Economic Lesson
In the U.S., the personal income tax and social insurance taxes together total close to 85% of all taxes collected by the U.S. government. Corporate income taxes are a distant third at 8% while federal sales taxes are 3%.
An Economic Question: Who do you think bears the incidence (pays for) the NYS buttered bagel tax? The seller, the buyer or both?Read More