Finance a la shmoop, what is a consumption tax? Ah consumption wasn't that a [Woman coughs up a dolphin]
disease in the 17th century like you know your lungs filled up with water, [Woman banging her chest]
couldn't be a tax on that... Hmm, like how would they ever collect. Well in fact a
consumption tax in finance land is about taxing what you consume yeah duh so
continuing from the 17th century and then 18th centuries remember that Boston
Tea Party thing, yeah that thing. Well the Brits wanted to tax American tea like a [Bags of tea leaves]
farthing per bushel or whatever the currency and measures were back then but
that was a tax per unit or per element of consumption, yeah consumption tax. Gas [Someone pouring tea out of a pot]
tax, that's a consumption tax, gas is 3 bucks [Someone filling up their car]
a gallon or so and the tax is per gallon something like 80 cents give or take in
a red state and more than that in the blue so the more gas you consume the [States shown on the map]
more tax you pay. All right consumption tax, real estate well it's usually taxed [Guy pointing at a list of consumption taxes on a whiteboard]
based on the market value of the place you just bought, buy a more expensive
house and well you'll pay a higher amount of tax so what's a non
consumption tax if all those are consumption taxes. Well income tax for
one you're not consuming anything your yearly tax bill isn't based on how much [Cup of tea is knocked out by yearly tax bill]
stuff you buy but how much dough you made. Well same with a payroll tax [Money being counted for the tax bill]
payroll tax is based on how much money someone makes at a job and the
conditions of their employment again not about the consumption of any goods or [Guy eating a burger]
service you know other than all your free time... All right well the estate tax
is another example unless Congress passes a bill the taxes are zombiefied
brethren based on the amount of brains they consume all the estate tax is based [Girl counting her money]
on income sort of definitions of income are squishy.. rather than consumption so
yeah that's kind of an iffy one. All right then again those zombies have been
dodging the IRS for a while now and you know we got to make them pay their fair [Guy in a suit looks scared of the zombies]
share let's say they foot the tax bill for the next being how about that, no but [The guy in a suit is chased away]
that's not gonna work everyone knows you know the zombies well they're a bunch of [Guy on the floor with his head cracked open]
deadbeats