Something to boggle your mind..

[crockett]

The average US $1 bill stays in circulation an average of 21 months. How much tax do you think the govt makes off that single dollar?  (there is no answer that I have this is just an opion question)

 

[texasmom]

at 8c tax, exchanging hands once a day for 12 months =  29.20
at 8c tax, exchanging hands once for the other 275 days (completing the 21 months) = 22.00
total = $321.20

not bad for a buck.

That's not correct... actually, I'm only going off of state sales tax.
How many other times would it be taxed... other than by state sales tax?

[Leslie]

I'll take a stab at it, though there are many who are much more knowledgeable about how money works.  This is some math.

With four billion dollar bills in circulation, and with each dollar exchanging hands once per day, the .08 sales tax over 640 days would amount to $204,800,000,000.00 (two hundred and four billion, eight hundred million). 

There are many taxes.  Just about everything you do involves a tax.  Gasoline, phone service, water and sewage, power bill, gas bill, car tag, driver license, property tax, excise taxes, tobacco tax if you smoke, liquor tax if you drink, on and on, etc... ad valorem taxes.

Add all those up and probably at least 95% of the dollar is taxed.  So let's say with four billion dollars in circulation taxed at .95 with each dollar exchanging hands once per day, the tax over 640 days (lifespan of a one dollar bill) would be:
640 x .95 =  $608

$608 x $1B = $608B

$608B x 4 = $2,432B or (two thousand four hundred thirty two billion dollars or
                                ($2,432,000,000,000.00 or $2.432T)

And that's just for the four billion dollar bills in circulation over 640 days.  Two trillion four hundred thirty two billion dollars.  Add to that the total amount of paper currency in circulation taxed at .95% and it is mind boggling, though larger denomination bills are handled less and don't suffer as much wear and tear in circulation, making their life spans longer.  These would be the taxes from bank notes in circulation. 




Les

[Newman5]

Did you have to get your abacus out, Les?

[Leslie]

I used to know how to work one of those things.   I have a neat lamp made from a couple abacuses.  Anyway I'm probably all wet when it comes to my figuring.  Just thought I'd post for something to do.  It is an interesting subject.



Les

[majic]

I think the once a day thing is overestimated.  Many of the bills will be sitting at the bottom of a stack in cash registers and bank change funds (not to mention vending machines and strippers' purses).  My first thought was once a week avg.

So, 21 months X 4 weeks a month (add in 7 more weeks to cover the extra days in a month) = 91

Taxed each time at the 8% figure TXmom suggested = $7.28

I'll go with that.

[Shuffler]

at 8c tax, exchanging hands once a day for 12 months =  29.20
at 8c tax, exchanging hands once for the other 275 days (completing the 21 months) = 22.00
total = $321.20

not bad for a buck.

That's not correct... actually, I'm only going off of state sales tax.
How many other times would it be taxed... other than by state sales tax?

Your State tax is actually 6% in Texas and the rest is City and possibly County or Metro

[crockett]

I'll take a stab at it, though there are many who are much more knowledgeable about how money works.  This is some math.

With four billion dollar bills in circulation, and with each dollar exchanging hands once per day, the .08 sales tax over 640 days would amount to $204,800,000,000.00 (two hundred and four billion, eight hundred million). 

There are many taxes.  Just about everything you do involves a tax.  Gasoline, phone service, water and sewage, power bill, gas bill, car tag, driver license, property tax, excise taxes, tobacco tax if you smoke, liquor tax if you drink, on and on, etc... ad valorem taxes.

Add all those up and probably at least 95% of the dollar is taxed.  So let's say with four billion dollars in circulation taxed at .95 with each dollar exchanging hands once per day, the tax over 640 days (lifespan of a one dollar bill) would be:
640 x .95 =  $608

$608 x $1B = $608B

$608B x 4 = $2,432B or (two thousand four hundred thirty two billion dollars or
                                ($2,432,000,000,000.00 or $2.432T)

And that's just for the four billion dollar bills in circulation over 640 days.  Two trillion four hundred thirty two billion dollars.  Add to that the total amount of paper currency in circulation taxed at .95% and it is mind boggling, though larger denomination bills are handled less and don't suffer as much wear and tear in circulation, making their life spans longer.  These would be the taxes from bank notes in circulation. 




Les

What about income tax.. on top of that.. wouldn't that be roughly 28% on top of the .08% sales tax not to menton what the employer would pay which is something close to 12% I think. That would be added anytime someone earned that single dollar. That's why I say I bet it would boggle the mind at how much tax is paid on every single dollar.

btw sales tax here in Florida is 6% in most places but 7% where I live.

[john9001]

i don't use cash, i use a debit card or electronic transfer.

[midnight Target]

I need to brush up on my cipherin and my guzintas.