Salient taxes — obvious to the consumer — cut marijuana consumption. Hidden taxes, by contrast, boost revenue. — NPR.
A sales tax added on at the end tends to get ignored by consumers, so it increases revenue. Fine. Let the economists say how stupid people are. I’m sticking with my story. Being a fan of the administrative efficiency that early collection at a choke point provides, I tend to overlook the biases that different tax structures bring to the consumer’s mind.
Significant retail taxes are crazy. They allow pilferage and shoplifting (and Oops! Our truck got hijacked). And bundling — hotel room $200 with open smoking downstairs. What’s the tax there?