Issue 690 Taxing goods October 1, 2015

Unlike services goods can be taxed.  The reason for this is as follows.

Taxing goods:  Goods are physical objects unlike services.  A services value can at times be hard to measure but is ultimately not refundable.  Once given, irrespective of its quality, it cannot be returned.  However, goods can be measured for quality and that value can change over time.  Basically it is easier to value than a service prior to it being purchased and thus makes it easier to decide a value that can be taxed.  You see, unlike services where the value of such can be arbitrarily decided, a good's value can be measured at all times such as a house, a car or a toy.  So there is less risk to the buyer.  However, this is not the primary reason why goods can be taxed even though it makes sure taxing it is actually fair to both parties involved (basically, less chances of being swindled).

The real reason why it can be taxed is due to the exchange of one person property for another's.  Yes, that small tiny state of limbo where you give your property to another person’s in exchange for theirs.    That tiny limbo state is when the people making the exchange both own and do not own the items. It is the reason it is taxable.  If there was no physical exchange of property (money counts as one's property), then it would never be able to be taxed.  As such, sales taxes are 100% legal and acceptable.  Sure, goods can be bought to aid in the expression of one's rights, but you are exchanging property.  Even the artist must be taxed for selling his art if it comes in physical form as a consumer goods such as in an art book or a sketch (an art project for a park, or for a company where they are commissioned would be an exception to this as that is considered a service).  Get it?  If you do not exchange property then you cannot be taxed, but as a good is property and money is property, you can be taxed if one is exchanged for the other.

Conclusion:  There are many ways to say it as I have done here, but goods can basically be taxed.  An exception could be your doing a service in exchange for that good, which would make that situation non-taxable under this premise.  However, say you exchanged a bottle of wine for a wedding cake?  Is that a taxable situation?  Yes it is for the items have value and there is an exchange of property occurring. Sure this example does not work in most of the United States but bartering still happens here in the United States like in Alaska, and in other parts of the world like Africa and Asia.  So money is not the only form of property that needs to be exchanged for taxation to take place.  It can occur when a good is exchanged for another good.  So I hope that helps to clarify why goods can be taxed. Feel free to read the previous issue on why services should not be taxed as well to get more clarification about taxation.  Hope you enjoyed reading.