Survivor 14

[Ghoulish Delight]

Originally Posted by Alex Stroup

The sales tax is itself taxed. So the 4% (when I was there) exise tax is really something like 4.17% when it gets added to a purchase price.

Except that due to the properties of supply and demand, the purchase price ends up being lower than it would if there weren't a tax for any goods that are not perfectly inelastic (namely, everything). So something that would cost $10 in a non-taxed world would not cost $10.42 (which would leave the seller with $10 revenue after the exise), it would be somewhere in between $10 and $10.42. As long as there is elasticity in demand, the producer will always share some of the cost of tax with the consumer.