You guys sure got it tuff.
Here in Australia we have whats known as GST ( Goods and Services)tax...not unlike the English VAT tax. It replaced the old wholesale sales tax.
When you purchase a new item or service then the seller adds 10% and pays that to the federal tax fella.
However, if the fella who sold you the new item or service purchased it from some-one else then he ( the fella who sold it to you) would have paid 10% on his purchase cost ( to the fella he bought it from), and deducts that from the tax he collected from you.
It is the difference which gets paid to the federal fella.
Once an item becomes second hand...it is exempt of GST tax.
To give you an example....lets say a cobra kit manufacturer buys raw materials and bits and pieces to make a cobra kit and it costs him $10.000 plus $1000.00 GST tax ($11000) to his supplier. He builds the kit and sells it to you for $18.500 plus GST of $1850.00 ($20350).
When he does his GST return at the end of the month...he declares he collected $1850.00 from you and credits the $1000.00 paid to his supplier, and sends a cheque off for $850.00. to the federal tax fella.
Once you own it and it's second hand....you can sell it to ya mate down the road and no tax is payable.
However, If Jamo was practicing in Aussie land and was representing you in some dispute which went to court and a barrister was used for the court hearing.
Jamo would charge you $50,000 for his work plus $5000.00 GST. Included in that figure was $1650.00 ($1500 plus $150.00 GST)for a half days work by the barrister. Jamo would send off $4850.00 to the federal tax fella.
It was the solution the federal Government choose when confronted with the problem that the wealthy were not paying sales tax on many items during the older wholesale sales tax regime.
The wealthy are huge consumers....they buy expensive cars, expensive houses, employ expensive solicitors and barristers to save them tax. They now pay a larger share of the country tax burden.
Bay Area News @ 11 PM
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