Sunday, March 9, 2008

Fuzzy Math

Beating Cook's sales tax

After shopping around for a new laptop, Patti Jo Mitchel took a 40-mile drive from her home in Chicago's Bridgeport neighborhood to a Best Buy in Indiana.

It wasn't a sale that lured Mitchel over the state line. It was the sales tax.

"On a big-ticket item like this, I figure it's worth it," Mitchel said while making her purchase Thursday.

By crossing the state border, she saved more than $32 on her $1,075 purchase of a laptop and accessories.

OK, so assuming by 40 mile trip they mean there and back, and assuming she had one of dem SUV's that gets 10 miles to the gallon. Gas was about $3.50 a gallon when I was out yesterday, so that means she spent $14 on gas for the trip. So that's down to $18 savings. She probably spent 1 1/2 to 2 hours more going to Indiana than she did if she'd stayed in Chicago. Let's use the IL minimum wage to put a price on that time. $7.50 an hour. We go with 90 minutes, that's $11.25. So we're down to $6.75. If she took the skyway, $3 each way, $6 total. Now we're at 75 cents. This doens't count the cost of the pollution she caused. But now were under a tenth of 1% savings.

I wish the Tribune had counted all the costs when saying the woman saved money. It would have been really easy. But no, oversimplify, as always. It is alluded to in the article, that border communities will be more affected than downtown Chicago, but that's because all the costs I outlined above go away. And they don't mention that. Why not do the calculation - see if driving 40 miles away to save 2% on taxes is worth it? Isn't that what they, as our MSM, should do? Inform us fully?

1 comment:

Sarge said...

Once I drove to Ann Arbor for a milk shake.

It was really good.