A hidden tax is a tax that is not visible to the taxpayer. These taxes can raise prices of goods and lower salaries for workers. Hidden taxes, although hidden, can decrease the purchasing power of individuals significantly.
Many kinds of tax behave like hidden taxes:
Corporate income tax
Because of this tax, shareholders and employees get less dividends and salary.
Tariffs or import taxes
It lowers competition by raising the price of imports and products produced outside.
Sin taxes
Taxes on alcohol and cigarettes are highly regressive.
Travel taxes
Utilities taxes
According to a 1998 study, taxes take up 48% of the price of gasoline.
Inflation tax
It is a regressive hidden tax.
Financial repression
A range of measures which governments can employ to reduce their debt, which are often accompanied by inflation.
Profits from government-owned corporations
Especially when a government-owned corporation enjoys a legally protected monopoly and records excessive profits, such profits may be criticized as
hidden taxation. Governments in some jurisdictions directly own utilities (making such profits related to utility taxes) and some monopolize the alcohol trade (making such profits related to sin taxes).
Sales taxes such as turnover taxes
A study by the Institute for Policy Innovation suggested that hidden taxes account $2,462 per capita.
Quintiles of Household Cash Money Income according to the Tax Foundation, Calendar Year 2004
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