Just read a bit in Tax Notes that shows you cannot logically separate financing arrangements from sticker price. Some Brit department stores are trying to finagle the VAT by characterizing part of the retail price as a credit card processing fee, thereby shunting taxable value added into non-taxable fees.
This is a potential problem in the flat tax as well, if financial sector income is exempt from tax. mbs -----Original Message----- From: PEN-L list [mailto:[EMAIL PROTECTED] On Behalf Of Daniel Davies Sent: Monday, July 19, 2004 1:14 PM To: [EMAIL PROTECTED] Subject: Re: oops, again they wouldn't, necessarily. The statistics people try to get a fix on the genuine average price of things, but it's a hell of a job to be sure you're comparing like with like, and the bias is likely to be entirely one way; as Michael noted earlier, how often do they make a mistake in your favour, or give you an undisclosed discount? The issues are not a million miles different from those involved in hedonic pricing. It's also very common indeed for price indices to be moved by cheap financing or discount deals which aren't necessarily available to poorer people; the differential between average prices and prices charged in poor urban areas where people don't have cars to drive to the supermarket is a known problem in the UK stats at least. dd
