ShmoopTube

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finance a la shmoop. what is sales tax? and what are progressive and regressive

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taxes? thumb tacks horse tax sales tax. all right well sales tax is yet another

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way the government collects money to spend on things they need to you know [money in a vault]

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govern us. so if you buy an acme chihuahua launcher in california while

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you pay eight percent sales tax on it. meaning you thought you were only

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spending a hundred bucks and it turns out that the launcher well really cost

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you 108 dollars, and then you could tack on whatever damage the chihuahua does.

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all right well each state has different sales tax charges. some states are high,

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some states are low. but sales tax is considered regressive. which sounds like

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a bad word and it while kind of is intended to be bad sounding. why? well

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because everyone pays the same tax rate whether they're a hard-working plumbing

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supply parts vendor making 200 grand a year, or a lazy bridge Tollbooth taker [pipe maker's logo]

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who loves keeping their Facebook pages up-to-date. they pay the same rate when

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either one of them buys a two-in-one laminating toaster, oven they pay the

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same sales tax rate on that oven, and that is called regressive. the thought

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process that being well 8% taxes on 200 grand in earnings a year is a whole lot

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easier to pay than 8% taxed for someone earning only 20 grand a year. and yes

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politicians want to punish the hard-working, saddle them with more

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burden so that the less financially beefy, can you know keep their facebook

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pages very up to date. well the opposite of regressive is the positive sounding

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progressive tax system, where the hard-working plumbing supply parts dude

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pays meaningfully more in tax and tax rate than the Tollbooth cash taker with [man frowns behind a desk]

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the really up-to-date Facebook pages. of course that cash taker didn't study in

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school didn't work hard early or later in life and now lives in a cockroach

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infested apartment while the plumbing supply vendor is about to purchase his

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second home, so maybe there is something after all to that education thing. like

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kids study in school or you like that guy all right. well is

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progressive tax good and regressive tax bad? maybe maybe not who knows not for

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shmoop to say, all we know is that progressive and regressive taxation both

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live in American society and they're the one-two punch that the friendly IRS man

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uses to well you know knock you out. [man in suit throws a punch]

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