Hidden Taxes
A hidden tax is a tax that is not visible to the taxpayer. These taxes can raise prices of goods and lower salaries for wokers. Hidden taxes, although hidden, can decrease the purchasing power of individuals significantly.Taxes that are indirectly assessed upon consumer goods without the consumer’s knowledge. Hidden taxes are levied upon the goods at some point during the production process and therefore raise the cost of the goods sold. However, this tax is never revealed directly to the consumer, who simply pays a higher price for the good, not knowing that part of that price is due to this tax.
Many kinds of tax behave like hidden taxes:
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]
Some ad valorem taxes are an example of a hidden tax, as are taxes that are imposed at the wholesale level. Most consumers are aware that there is a tax on retail goods (sales tax), but this is by no means the only tax levied on consumer goods. Hidden taxes are almost invariably passed on to the consumer.