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Old 04-03-2011, 08:15 PM   #16
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Sales taxes for building a new home


Yeah you do end up paying sales tax twice. One for the materials (the builder needs to make a living afterall and will pass the cost down) and then when you buy it! Nevermind, when you sell it, the buyer will have to pay taxes again! The goverment has a license to steal. Don't complain too loud though or they'll tax you for complaining about taxes!

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Old 04-03-2011, 10:59 PM   #17
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Sales taxes for building a new home


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Originally Posted by Red Squirrel View Post
Yeah you do end up paying sales tax twice. One for the materials (the builder needs to make a living afterall and will pass the cost down) and then when you buy it! Nevermind, when you sell it, the buyer will have to pay taxes again! The goverment has a license to steal. Don't complain too loud though or they'll tax you for complaining about taxes!
You don't get taxed twice. I was referring to two specific cases. Either you build it yourself and you pay the taxes as you purchase materials or you pay taxes to your builder through construction draws. If you were to get taxed twice, the price of a house would be outrageous (although some prices already are).

The US government has looked at (and may implement) a Value Added Tax (or VAT), which would essentially tax each step in the production and sale of a product or service. The tax percentage is quite low (a couple percent), which it has to be since every time a product is refined, the tax is applied. So, you mine copper - the mining operation is taxed. The copper is sent to a mill for refining - the refining gets taxed. The mill send the copper to wire shop - the wire making is taxed. The wire hits the hardware store - the sale of the wire gets taxed.

Politicians seem to like the VAT because a small increase in the level of the VAT can result in a big change in collected revenue. But what is the difference whether you pay a little bit of tax with each step one big tax at the end step? Nothing. I think politicians think it gives them cover because they can say that a change in the VAT is very small and they think nobody will call them out on it.

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