Quantity tax

After the familiar terminology, a distinction lot of taxes (taxes quantity) and value-added taxes (ad valorem or value taxes).

A quantity tax (sales tax ) is a tax that is levied per unit of quantity bought or sold, i.e. This means that a certain amount has to be paid to the tax authorities for each unit of quantity of a good purchased . Quantity taxes are linked to assessment bases such as pieces, liters or kilograms and tariffs of currency units per piece, per liter or per kilogram are provided. Quantity taxes are historically older than value taxes because on the part of the financial administration they only require the ability to count, while value taxes require reading or arithmetic skills.

A quantity tax of t Euro is therefore added to the producer price p, so that a consumer price of q = p + t results. Quantity taxes are usually taxes on consumption and expenditure.

Volume taxes have the disadvantage that they do not grow with the inflation-related rate of monetary magnitudes, as is the case with value taxes. In order to compensate for the inflation rate , tax increases are necessary, which politicians are difficult to convey. So most amount taxes degenerate in the wake of inflation and real growth to petty taxes and were abolished.

example

p net price; Q amount; t volume tax rate; µ value tax rate

Value added tax: TW = µ * p * Q

Quantity tax: TM = t * Q

if p rises, e.g. due to inflation , TW rises in the same proportion, TM remains unchanged. To adjust for inflation, t would have to be increased, which corresponds to a tax increase .