ShmoopTube

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Finance a la shmoop, what is a consumption tax? Ah consumption wasn't that a [Woman coughs up a dolphin]

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disease in the 17th century like you know your lungs filled up with water, [Woman banging her chest]

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couldn't be a tax on that... Hmm, like how would they ever collect. Well in fact a

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consumption tax in finance land is about taxing what you consume yeah duh so

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continuing from the 17th century and then 18th centuries remember that Boston

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Tea Party thing, yeah that thing. Well the Brits wanted to tax American tea like a [Bags of tea leaves]

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farthing per bushel or whatever the currency and measures were back then but

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that was a tax per unit or per element of consumption, yeah consumption tax. Gas [Someone pouring tea out of a pot]

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tax, that's a consumption tax, gas is 3 bucks [Someone filling up their car]

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a gallon or so and the tax is per gallon something like 80 cents give or take in

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a red state and more than that in the blue so the more gas you consume the [States shown on the map]

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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]

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based on the market value of the place you just bought, buy a more expensive

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house and well you'll pay a higher amount of tax so what's a non

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consumption tax if all those are consumption taxes. Well income tax for

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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]

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stuff you buy but how much dough you made. Well same with a payroll tax [Money being counted for the tax bill]

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payroll tax is based on how much money someone makes at a job and the

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conditions of their employment again not about the consumption of any goods or [Guy eating a burger]

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service you know other than all your free time... All right well the estate tax

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is another example unless Congress passes a bill the taxes are zombiefied

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brethren based on the amount of brains they consume all the estate tax is based [Girl counting her money]

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on income sort of definitions of income are squishy.. rather than consumption so

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yeah that's kind of an iffy one. All right then again those zombies have been

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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]

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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]

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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]

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deadbeats

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