Sales taxes are not regressive; they're simply not progressive.

Discussion in 'Economy' started by Supposn, Jul 2, 2012.

  1. Supposn
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    Supposn Senior Member

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    Sales taxes are not regressive; they're simply not progressive.

    I often disagree with Huckabee but I do agree that a general sales tax is among the simpler and more equitable tax revenue producing methods employed by modern industrial nations.

    There’s no such thing as a “fair” tax but some methods are more equitable than others. Opponents fault ales taxes as being regressive.

    Due to special strokes for special folks, (i.e. tax loop holes reducing higher earners’ taxable incomes, progressive income taxes are more regressive and less progressive than conservatives would have us believe them to be. Sales taxes are not regressive but they are less progressive than progressive income taxes.

    [Prior to our temporary current waiver of FICA payroll taxes, even the working poor that did not qualify for Medicaid paid the employees’ 7.65% of their gross wages a their share of FICA. Wealthier earners have much less or no incomes classified as employment compensation. Investors, speculators or those with various non-employment incomes pay little or no FICA taxes.
    The working poor pay little or no income taxes but considering that they are among our nation’s poorest segment of our nation’s income earners, directly taxing 7.65% of those that cannot medical insurance is a national disgrace. Mitt Romney is among our nation’s very highest income earners and last year possibly paid no more than 15% of his incomes for income taxes.

    We cannot satisfy those who object to progressive tax rates unless we can retain revenue neutrality and/or we can sufficiently reduce or eliminate tax loop holes and/or reduce spending, and/or increase our tax rates and/or our debts and/or further financially bleed our poor.

    We can forego revenue neutrality if we’re willing to accept additional federal debt or reduce spending. All parties agree that we should reduce spending but we cannot concur upon which spending items should be reduced or eliminated.
    We could also eliminate progressive tax rates by simply bleeding an additional 7.65% of taxes from the working poor. I iterate our taxing 7.65% of those that cannot afford medical insurance is a national disgrace. To increase the rate of their taxation would be a despicable act.]

    I advocate reducing tax rates upon net incomes by eliminating unjustifiable and inequitable reductions of taxable incomes. I further advocate that the per-capita reducing a percentage of taxable incomes, we grant greater consideration for poorer taxpayers by granting a specific per capita amount of tax credit per taxpayer and their dependents. Furthermore that per-capita amount should be annually cost of living adjusted by government’s statisticians rather than by the legislators’ political determinations.

    I advocate that tax credit be granted only for taxpayers and dependents that have been covered by a federally qualified health insurance policy and those policies should additionally be subsidized by the federal single payer. All of these tax credit amounts should be annually cost of living adjusted, (i.e. COLA’d). THIS could also justify replacing some flat amounts of taxable income with a general sales tax.

    A general sales tax can be drafted to be somewhat progressive by identifying and favoring items that are a greater portion of less wealthy families’ purchases. We can waive sales taxes upon non-restaurants or caterers provided foods and medicines. We can waive sales taxes upon a capped amounts of each commuter trip or monthly residential rentals or utility bills.
    (Those capped amounts should be COLA'd).

    Respectfully, Supposn
     
  2. Widdekind
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    Widdekind Member

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    for centuries, economists (e.g. Adam Smith) have advocated sales taxes, because they are taken from money passing hand-to-hand, at the point of sale, by the private sector (sellers), at zero cost to the Public (no taxes for tax collector salaries).

    Taxes should be "fair" and "even-handed", as well as easy & economical to implement. Sales taxes are the best available, in those regards. Taxes affect the private sector. Taxes "penalize" private sector activity. Ergo, taxes impose a "Public scorn" (of sorts) upon economic activity. So, if taxes are not "money blind", equitable for all transactions; then taxes are demoting some activities, and promoting others. Such taxes impose de facto Public policy into an economy. That's bogus. Sales taxes treat every dollar equally, they are fair, equitable, even-handed. (Of course, every sale should incur the tax, e.g. every sale of a share of a business.)

    Now, if sales taxes affect poorer people "regressively"; then, that is a Public issue for Society; and Public taxes could be spent on Public assistance, via laws voted on by the electorate. A modest 10% flat tax could cover current Government purchases (the "G" term in GDP), and would not be more burdensome than existing sales taxes, everybody already pays. (To cover current welfare costs would require a 30% flat tax.)

    The fact remains -- on average, 30% of the retail costs people pay, for new final goods & services, winds up wending its way back to "Uncle Sam" as tax. Again, US consumers already pay a 30% sales tax -- they just don't recognize that fact, because the US tax structure seemingly (?) "squirrels taxes away" everywhere, spreading out the taxes, over sales, pay-checks, property taxes, capital gains taxes, other (??) taxes. A flat-rate sales tax would be "Keep It Simple Stupid", with no "funny money business". (Even non-tax-lawyers could, then, understand their taxes, and how money (!!) moves in 'their economy.)

    A common flat-rate sales tax, on every sale (goods, services, labor, land, stock), would be "money blind", economically equitable & neutral. If necessary, Society could augment that super-simple tax system (one tax for everybody & everything), with Public assistance programs, funded from those taxes. Taking other people's money (taxation) should be totally equitable & neutral. Then, Society spends those "equal dollars" for Public benefits. Taxation is taxation (taking other people's money); Public policies are Public policies (spending other people's money for Public benefit). Logically, the two are distinct; legally, the two "ought" to be distinct, too (if laws be logical, and comprehensible).
    Q: why would anybody want to face a labyrinthine, complex tax code, requiring more shelving, than they themselves could afford ? what is the allure ? ("man, i wish i had to pay tax-lawyers"; "man, i yearn for headaches every April"; "man, i love spending so much time"; it is actually impossible, to get US citizens, to want simple & straight-forward laws, on taxes & money ??)
     
  3. Supposn
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    Supposn Senior Member

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    Widdekind, we’re generally in agreement about sales taxes.
    Respectfully, Supposn
     
  4. Ariux
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    Ariux BANNED

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    Suppose a young couple buys a house, has some children, and spends all their money to live on, they're paying sales tax on 100% of their income (actually more than 100%, but I don't want to confuse a stupid person like yourself). But, a rich couple, maybe even the same couple 30 years later, pay sales tax on maybe 50% of their income, because they have lower living expenses and more income. You say that's not regressive. See how f-ing stupid you are?

    Shithead, how is a sales tax inherently simpler and more equitable than an income tax? Dazzle me with your stupidity.
     
  5. OohPooPahDoo
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    OohPooPahDoo Gold Member

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    They aren't regressive if you apply them to EVERYTHING - like mortgage interest and houses. But most sales taxes aren't like that.
     
  6. OohPooPahDoo
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    OohPooPahDoo Gold Member

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    No tax collector salaries? LOL! How does that work? We just sit back and expect businesses to send in X % of their sales, scout's honor?
     
  7. Widdekind
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    Widdekind Member

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    yes, exactly -- by Law, sellers must report their revenues, and send X% to government, all without charging government anything for the service (tax collection), which is mandated, as a Public service duty

    cost to Public: zero (every law does require enforcement)
     

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