Sales tax is handled differently than in most countries. The rate of sales tax can be very high, and in some cases adding an extra 50% to the cost of the item. There will be 3 sales tax rates. Essential purchases such as nutritional food, or clothing is not taxed at all, and therefore will be given a 0% sales tax. For things that are not essential, but not luxury will be charged at a rate of 25%. For luxury goods, or items that do not comply with NSC requirements will be taxed at 50%. And yes, one might question that sales taxes hurts the poor, but this is why there is scale system in place of taxes. Most of the money spent by poor people are essentials which means they are not paying anything for taxes on the items they purchase. However, someone making $1,000,000 a year might indulge in a $250,000 sports car. Therefore, he can pay the extra $125,000 for this purchase. Below are some examples of various taxes:
Foods
Groceries with a nutritional value (meats, vegetables, dairy, and so on) will not be taxed at all. This will be determined by the UPC code that is on every line of products. This is likely where most poor people are spending their money. Since there is no sales tax on such items, there is no penalty to the poor person.
Going out to eat though is not an essential. While you are still buying meats and vegetables – you are also paying for someone to cook the meal for you, and you are paying someone to bring you the food, and wait on you. While the meal itself might be essential, the experience is not. For these types of purchases will be at a standard tax rate, and that would be 25%.
Candy, soft drinks, soda pops, and high end foods (such as caviar) are considered as luxury items. Yes, a poor person might buy a Vanilla Coke, but this is not essential, and therefore if they are willing to pay the luxury tax, then the drink will hopefully be worth it. These items are charged at luxury rate, and therefore it is 50%.
Housing
Housing is a little tricky. The system may sound like it makes no sense, but there is rationale. Renting or buying abandoned properties will not have a sales tax. If the purchaser purchased an abandoned house for example to eventually rent it out, he would have to bring the house to NSC requirements. For purchasing of condos, the tax rate is 25%. As the nation builds homes for their population, this will eventually become the preferred option for most people. Buying houses however will impose a luxury tax unless it was abandoned. The reason for this is land is at a premium. You can’t simply create land, and houses are a wasteful way of building, and living. NSC requirements will require that there is sound insulation on the perimeter of every premise, so you shouldn’t hear anything from the apartment next to you unless they were screaming, or playing media too loud. Simply put, it is better to promote building up, than building out.
Transportation
When taking county wide public transportation, there will be no tax. The price noted is the final price. When buying a used car that meets NSC requirements, there also be no tax. When buying a new vehicle that meets NSC requirements there will be the standard 25% sales tax applied. When buying a luxury car, or one that does not meet NSC requirement, then the taxes will be 50%.
Sales Tax Distribution
Every sale and transaction is rated at time of purchase. If someone buys a car, and that has a 25% sales tax, then the money will automatically be transferred to the level of governments that the sale tax goes to. 33% of the taxes will stay within the county of the purchase. 33% of the taxes will go to the county of sale, and 34% goes to the national government. The county of sale can be different than the county of purchase. This will likely take place with online purchases. One person can live in Eastern County, and the item for sale is in Western County. Since the item was technically purchased from Eastern County, then Eastern County will receive 33% of the tax, and Western County will receive 33%. And as mentioned, the national government will receive 34%. Therefore, a purchase that had 10,000 in taxes – each county will get $3,333, and the national government will get $3,334.