46% effective tax rate on the $99 iPhone 3G
So lot of discussions recently about the price comparisons of the smartphones iPhone, Pre and G1 with the introduction of the 99$ iPhone 3G and the 199$ iPhone 3GS. The billshrink math here and one related discussion here
Another angle to this is the tax on the 99$ iPhone. Many or most of us know that the tax on subsidised phones are really on the pre-subsidized price. But this gets interesting with the new 99$ iPhone, why?
Cost of the subsidized iPhone 3G = 99 dollars
9.25% tax in CA = 46.16 dollars (9.25% on 499 unsub price)
Total cost (without monthly commitment) = 145.16 dollars so that is 46% tax and not 9.25% from a pure end user perspective.
So how is this different than before? Its not but the % are skewed. With $199 iPhone 3G you were pay 55 dollars as tax which is less than 30% effective.
The interesting thing is with pre I believe the tax is charged on 849$ so you end up paying 78 dollars as tax vs 55 on the $199 iPhone 3G S.
Its common knowledge about the tax on pre-sub price but 46% effective tax on a iPhone 3G throws a new angle on how you look at the price.
