Hidden Taxes

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DEFINITION of 'Hidden Taxes'

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.

INVESTOPEDIA EXPLAINS 'Hidden Taxes'

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.

RELATED TERMS
  1. Stealth Taxes

    A type of levy that governments use to increase their revenues ...
  2. Sales Tax

    A tax imposed by the government at the point of sale on retail ...
  3. Duty

    1. A tax levied on certain goods, services or transactions. Duties ...
  4. Ad Valorem Tax

    A tax based on the assessed value of real estate or personal ...
  5. Value-Added Tax - VAT

    A type of consumption tax that is placed on a product whenever ...
  6. Tax Rate

    The percentage at which an individual or corporation is taxed. ...
RELATED FAQS
  1. What are some examples of a value added tax?

    A value-added tax (VAT) is a consumption tax levied on products at every point of sale where value has been added, starting ... Read Full Answer >>
  2. What are some of the arguments for and against a Value Added Tax (VAT)?

    A value-added tax (VAT) is a type of consumption tax placed on a product whenever value is added at a stage of production ... Read Full Answer >>
  3. Where on my 1040 form do I report AGI (adjusted gross income)?

    On a standard IRS Form 1040, you add up and report adjusted gross income, or AGI, on line 37. Line 37 appears on the first ... Read Full Answer >>
  4. What is the difference between AGI (adjusted gross income) and net income?

    Adjusted gross income, or AGI, is often referred to as "net income," although the two are not necessarily the same thing. ... Read Full Answer >>
  5. What are the deductions taken to determine AGI (adjusted gross income)?

    The Internal Revenue Service, or IRS, allows for specific deductions to be taken from your total gross income. These deductions ... Read Full Answer >>
  6. What is the difference between disposable and discretionary income?

    According to the Bureau of Economic Analysis, or BEA, disposable income is the amount of money an individual takes home after ... Read Full Answer >>
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