Path: utzoo!utgpu!watmath!alberta!ncc!real!Oliver
From: Oliver@real.FIDONET.ORG (Oliver McDonald)
Newsgroups: can.general
Subject: Re: That F'n Fed. Sales Tax is Gonna *HURT*!!
Message-ID: <249.24E8E235@real.FIDONET.ORG>
Date: 16 Aug 89 03:35:27 GMT
Organization: The (only) Real World, Edmonton AB.  (403) 477-0803
Lines: 38

In an article of <14 Aug 89 22:52:56 GMT>, mart@csri.toronto.edu (Mart Molle)  
writes:

 MM>        manufacturer's price to distributor:    $100.00
 MM>        9% tax collected:                                $9.00
 MM>        Ottawa collects tax on initial value:                    $9.00
 MM>        
 MM>        distributor's price to retailer:        $150.00
 MM>        9% tax collected:                               $13.50
 MM>        distributor keeps tax he's already paid:         -9.00
 MM>        Ottawa collects tax on value added:                      $4.50
 MM>
 MM>        retailer's price to consumer:           $225.00
 MM>        9% tax collected                                $20.25
 MM>        retailer keeps tax he's already paid:           -13.50
 MM>        Ottawa collects tax on value added:                      $6.75
 MM>
 MM>So, in effect, the consumer pays $225.00+20.25 and Ottawa collects a 
 MM>total of $20.25, just as if it were done in the obvious way by simply    
 MM>adding a 9% retail sales tax.  The only real difference is that Ottawa    
 MM>gets part of its money early, 

Yup, and the accounting costs extra at each stage, and many distributors/   
retailers will keep their profit margins at te same level, BEFORE figuring   
their 'rebate' increasing the price to the consumer.  Much the same way that   
many retailers increased the prices of cigarettes in Alberta the day the tax   
went up, not when they got the new stock in....


Oliver.

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