Entroper on 11 January 2008
| CrashMan said: The problem with sales tax is its a regressive tax. The lower your income, the higher percentage of your income goes to tax. While it is true that the wealthier you are your tendency will be to buy more expensive things, but this is not universally true, and when you get down in to the lower income levels the effects could be disasterous. If ALL new items are taxed (clothes, food, etc) the effects would be even worse. Consider 2 people, one making 20,000/year one making 25,000/year. Say they have roughly the same taxable living expenses a year (say 10,000 pre tax, both would pay around 2300) Now this leaves the 20,000/year individual paying 11.5% of their income in tax and the 25,000/year paying 9.2% of their income each year in tax. I don't see how this is "Fair," especially since the 25000 is in control of more wealth in the country. |
That's why I favor not taxing food and clothing (basic clothing, not flashy designer crap), not taxing one car or one house up to a certain value, etc. IMO, it would be simpler to do this than prebates.
