Jim D. wrote, > also, a lot of the payment for education is in the form of taxes, and so > doesn't show up in the CPI. (Does the CPI exclude sales taxes? even if it > doesn't, it does exclude most other taxes.)
Only post-tax spending is included in the CPI. Public school spending, etc, does not appear in the CPI market basket. One implication, explored in "the literature," is that if the CPI remains constant, but the taxes paid fall then the standard of living will increase: there is now more money left after taxes over to buy stuff (even if the stuff has the same prices as before). If taxes grow, and the CPI remains the same, the standard of living will fall. The CPI _does_ take account of changes in the sales tax. (I think that property tax is claimed to be linked to the asset characteristic of houses and cars and, so, is not included as a component of the CPI). Eric
