Like a Magritte portray, we’re not consuming what we predict we’re consuming:
Equally, a potato crisp shouldn’t be actually a potato crisp.
Meals Taxes
In 2008, we had the “Great Pringles” resolution.
As a result of a British appeals court docket famous that the round snack was solely 42% potato, the 17.5% worth added tax (that was paid by makers of “potato crisps, potato sticks, potato puffs and similar products made from the potato, or from potato flour, or from potato starch”) didn’t apply. They thereby saved Proctor & Gamble hundreds of thousands of {dollars}.
Then, considerably otherwise, and way more lately, a British court docket determined that Walkers Sensations Poppadoms had been taxable potato crisps:
With marshmallows, it will get much more fascinating.
Additionally, in Nice Britain, (after two months, maybe, of sampling s’mores), a court docket determined that a big marshmallow was a tax exempt ingredient.
In the meantime, in the US, all of it relies upon. Michigan doesn’t tax a marshmallow as a result of it’s meals. Nevertheless, Indiana taxes baggage of marshmallow however not marshmallow creme. Then, providing a 3rd opinion, New York calls a marshmallow a tax exempt baking ingredient however not whether it is coated with chocolate or sweet.
Our Backside Line: Tax Sorts
Taxes redistribute revenue. They switch income from a supply of income to a recipient. At this level although, the variables are limitless. To find out a taxable merchandise, international locations, states, and smaller municipalities should outline the merchandise. From there, additionally they have to find out who bears the incidence of the tax. If the tax is progressive, just like the U.S. revenue tax, then a extra prosperous cohort pays a better % of their revenue. With a proportional tax, everybody pays the identical % of their revenue. And at last, returning to marshmallows, the tax is regressive. Every time, the tax is identical quantity for all of us, it’s regressive as a result of the much less prosperous hand over a better proportion of their revenue.
My sources and extra: Thanks to at least one sentence (or so) in a Laura Saunders’ WSJ tax column for uplifting right now’s put up. From there, the Tax Coverage Middle had way more element as did these articles, right here and right here, from the NY Occasions. However for extra, this econlife had the unlikely penalties of the window tax. Do have a look.
