 Jzyehoshua wrote: Quote: |
Hmm... interesting, it does sound more complicated than I'd first thought. Couldn't it just be a basic matter though of taxing goods or services more or less heavily based on their cost range?
| It's not just a matter of "taxing goods or services more or less heavily based on their cost range". In the federal arena, it's a matter of the differences between the direct and indirect taxing system.
Concerning the sales tax in the State of Michigan: "The tax has been held to be a privilege fee imposed upon persons doing business at retail." — Miles Laboratories, Inc v Simon 33 F supp 962
And, according to the Supreme Court of the State of Michigan: "The tax is not imposed upon the consumer, but upon those engaged in the business of making sales at retail".
It was noted that the retailer could add the tax to the cost of doing business, and list the tax on the bill, or just list the price of the item, or items, sold without lising the tax included, although the tax had already been included in the total price of the item. It is an excise tax. The tax is imposed on the "act of doing business at retail", the amount of the sales being the measurement for determining the amount of the tax owed. Thus, it is called: "Sales Tax".
Since the FairTax legislation imposes the tax directly upon the consumer in the cited section, it doesn't pass constitutional muster. Changing the legislation to match that of the State of Michigan — and, as a result, making it an indirect tax, or excise tax instead — it would then pass constitutional muster. |