The Customer is Always Taxed

How much do taxes really affect you every day? Via Yahoo, Investopedia notes a few examples including bread:

Way back in 1975, Ronald Reagan commented that there were 151 taxes that went into the price of a loaf of bread, and that those taxes made up more than half of the cost. While much has changed since then, and I could not independently confirm all of the taxes that currently go into a loaf of bread, that quote is still true in spirit if not in detail.

Farmers may be eligible for subsidies, but they pay property taxes and income taxes. The trucker who takes the grain to market pays taxes for his license, his rig and his fuel. The grain elevator has property, employment, income and sales taxes. The miller, the bakery, the store and every other link in the chain has its own taxes as well, whether they are assessed on property, sales, income, wages, fuel or what have you.

This is a prime example as to why I favor a national consumption tax (also known as the Fair Tax). As Reagan pointed out so long ago – the customers are already paying all the taxes because the cost of business taxes get passed on to the consumer. And with a national consumption tax, the customer would always know up front the true cost of the bread and the true amount of taxes being paid for it. This certainly strikes me, for one, as a more fair and transparent tax system, and that alone is likely to keep it unpopular in Washington.

There will be more on the Fair Tax at OB&B in the future but to learn more now, visit

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2 Responses to The Customer is Always Taxed

  1. Dennis Jagged says:

    Well I live in Southern California, so you can imagine that taxes affect my bank account rather profoundly. Good thing that proposition thirteen is still keeping my property tax down. My friend’s house runs her about $4500.00 dollars per year, and mine are at $700.00.

  2. Drae says:

    Hey, Dennis! The largest employer in California is the prison system, so thanks in large part to the drug war, Californians get to pay the taxes to fund it.

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