Hidden tax

Taxation

An aspect of fiscal policy
Policies Government revenue Tax revenue Non-tax revenue Tax law Tax bracket Tax threshold Exemption Credit Deduction Tax shift Tax cut Tax holiday Tax advantage Tax incentive Tax reform Tax harmonization Tax competition Double taxation Representation Unions Medical savings account Tax, tariff and trade
Economics Price effect Excess burden Tax incidence Laffer curve Optimal tax Theory Optimal capital income taxation
Collection Revenue service Revenue stamp Tax assessment Taxable income Tax lien Tax refund Tax shield Tax residence Tax preparation Tax investigation Tax shelter Private tax collection Tax farming
Noncompliance Tax avoidance Tax evasion Tax resistance Tax haven Smuggling Black market Transfer mispricing Unreported employment Tax shelter
Distribution Tax rate Progressive Regressive Proportional
Types Direct Indirect Per unit Ad valorem In rem Capital gains Carbon Consumption Dividend Ecotax Excise Fuel Georgist Gift Gross receipts Income Inheritance (estate) Land value Payroll Pigovian Property Sales Sin Single Stamp Steering Turnover Value-added (VAT) Corporate profit Excess profits Windfall profits Negative (income) Flat Wealth
International Financial transaction tax Currency transaction tax Tobin tax Spahn tax Tax equalization Tax treaty Permanent establishment Transfer pricing European Union FTT
Trade Custom Duty Tariff Import Export Tariff war Free trade Free trade zone Trade agreement
Religious Church tax Eight per thousand Teind Tithe Fiscus Judaicus Leibzoll Temple tax Tolerance tax Jizya Kharaj Khums Nisab Zakat
By country List of countries by tax rates Tax revenues as %GDP Albania Algeria Argentina Australia Azerbaijan Bangladesh Bhutan Bulgaria Canada China Colombia France Germany Greece Iceland India Indonesia Iran Ireland Israel Italy Japan Kazakhstan Lithuania Malta Namibia Netherlands New Zealand Norway Pakistan Palestinian territories Peru Philippines Poland Russia Singapore South Africa Sweden Switzerland Tanzania United Kingdom United States Uruguay

A hidden tax is a tax that is not visible to the taxpayer. These taxes can raise prices of goods and lower salaries for workers. Hidden taxes, although hidden, can decrease the purchasing power of individuals significantly.

Many kinds of tax behave like hidden taxes:^[1]

Corporate income tax: Because of this tax, shareholders and employees get less dividends and salary.
Tariffs or import taxes: It lowers competition by raising the price of imports and products produced outside.
Sin taxes: Taxes on alcohol and cigarettes are highly regressive.
Travel taxes
Utilities taxes: According to a 1998 study, taxes take up 48% of the price of gasoline.^[1]^[2]
Inflation tax: It is a regressive hidden tax.^[3]
Financial repression: A range of measures which governments can employ to reduce their debt, which are often accompanied by inflation.
Profits from government-owned corporations: Especially when a government-owned corporation enjoys a legally protected monopoly and records excessive profits, such profits may be criticized as hidden taxation. Governments in some jurisdictions directly own utilities (making such profits related to utility taxes) and some monopolize the alcohol trade (making such profits related to sin taxes).
Sales taxes such as turnover taxes^[4]

United States

A study by the Institute for Policy Innovation suggested that hidden taxes account $2,462 per capita.^[1]

Hidden tax

Quintiles of Household Cash Money Income according to the Tax Foundation, Calendar Year 2004^[5]

	Bottom 20 Percent	Second 20 Percent	Third 20 Percent	Fourth 20 Percent	Top 20 Percent
Total Federal Taxes	38.9%	55.7%	61.5%	64.4%	70.2%
Income	4.0%	12.0%	17.6%	22.6%	35.7%
Payroll	21.2%	30.6%	32.0%	30.4%	22.5%
Corporate Income	6.3%	8.4%	8.2%	8.2%	8.1%
Gasoline	1.6%	1.2%	1.0%	0.8%	0.6%
Alcoholic Beverages	0.8%	0.4%	0.4%	0.3%	0.2%
Tobacco	1.2%	0.6%	0.3%	0.2%	0.1%
Diesel Fuel	0.2%	0.3%	0.3%	0.3%	0.3%
Air Transport	0.5%	0.4%	0.4%	0.4%	0.4%
Other Excise	1.0%	0.6%	0.4%	0.4%	0.2%
Customs, Duties, etc.	2.2%	1.2%	0.9%	0.8%	0.5%
Estate & Gift	0.0%	0.0%	0.0%	0.0%	1.7%

References

1 2 3 Hidden Taxes: How Much do You Really Pay?
↑ Ed Brown, “Where Your Gas Money Goes,” Fortune, April 27, 1998.
↑ The Inflation Tax
↑ Hy-Sang Lee (2001). North Korea: A Strange Socialist Fortress. Greenwood Publishing Group. pp. 70–. ISBN 978-0-275-96917-2.
↑ Gerald Prante and Andrew Chamberlain, "Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991-2004," Tax Foundation Working Paper, No. 1, March 2007, available at

External links

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