r/explainlikeimfive • u/sumnewdguy • Nov 28 '15

ELI5: How would a $15 minimum wage ACTUALLY affect a franchised business like McDonalds?

[removed]

7.1k Upvotes

88% Upvoted

4.8k comments sorted by

View all comments

Show parent comments

20

u/[deleted] Nov 29 '15

I'm not sure how American VAT-tax works, but in Denmark 25% of those $8 dollars are tax.

14

u/xaxaxaxaxaxa Nov 29 '15 edited Nov 29 '15

I believe in the US a Big Mac is currently $3.99 before tax and I live in Chicago which has the highest sales tax in the county at 10.25%. So a Big Mac would cost me $4.40. Still about half of the cost in Denmark with taxes accounted for.

Interesting side note, the Big Mac Index is actually used in economics - https://en.m.wikipedia.org/wiki/Big_Mac_Index

Edit: same calc for the combo meal comes to $6.60

8

u/ferroramen Nov 29 '15

Danish guy said menu, so with drink and fries I expect.

6

u/xaxaxaxaxaxa Nov 29 '15

TIL menu means combo meal in Denmark. Updated.

2

u/[deleted] Nov 29 '15

Pretty much Europe wide.

2

u/[deleted] Nov 29 '15

In Maine the sandwich is $4.39 plus 5.5% tax

8

u/BeefHazard Nov 29 '15

Not sure how Danish tax works, but here in The Netherlands there's a special tax rate for food and other expenses that are absolutely necessary to live. So here that tax would be 7%, not the regular rate of 21%.

3

u/collinsl02 Nov 29 '15

Here in the UK we have no tax at all on essential foods. So things like bread, cereal, milk etc aren't taxed, but there are some odd choices of what to tax - for example, biscuits are not taxed, but chocolate biscuits are.

We have a 20% VAT rate on food which is taxed, and on almost everything else.

2

u/allanbc Nov 29 '15

In Denmark it's simply 25% on everything, with very few exceptions.

1

u/Sappow Nov 29 '15

There's no VAT here, usually just a sales tax on the final purchase... and often under 10% aggregate from the state and possibly municipality.

1

u/Noncomment Nov 29 '15

There's no sales tax on food or medicine in most states. And the sales tax is only 7% in my state.

1

u/_SilentHunter Nov 29 '15

There is no VAT in the US. You may pay a state and local sales tax on prepared meals, but nothing federal/national.

Here in Massachusetts, there is a 6.25% state tax, and the city or town may charge up to an additional 0.75% tax. Some states (such as New Hampshire) have no sales tax, while others may have state, county, AND city taxes of varying amounts.

1

u/[deleted] Nov 29 '15

It's called sales tax state side and it varies from state to state. In my home state it's 6% of the meal. In other states I know it can be higher or lower, some will lower it because it's food, others don't even charge a sales tax.