What do you think about states taxing sales instead of incomes?
Asked by
Nullo (
22009
)
January 18th, 2010
Instead of an income tax, the states would tack a tax onto the stuff that we buy.
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24 Answers
States do tack a sales tax on what we buy. It’s different by state. With few exceptions, they also collect an income tax as well.
Well, in theory it sounds great. It would benefit people with jobs that pay income tax. But what about the millions of people who are not working? I think higher sales tax would be harmful to those who are already struggling.
We have a 9% sales tax in my state and it absolutely sucks.
It would be fucking fantastic for the rich. I spend about 95% of my income on basic shit that I need to live comfortably. So 95% of my income would be taxed. While 10% of the person making ten million is taxed.
Shit, maybe I need to work harder and get that American Dream.
And I live in Oregon. We don’t have a sales tax.
We pay a 6% sales tax on everything except food, and a 5.8% state income tax.
To expand on what @johnpowell said, a sales tax is a “regressive tax” because the value cost of the imposed tax is greater to poor people than it is to rich people. The tax on a $5 sandwich is a greater percentage of the poor person’s budget than it is a rich person’s budget, because the rich person’s budget is much larger. Because he’s rich.
Think of it like a speeding ticket. $200 is an effective deterrent to keep me from speeding in my $500 rustbucket, because I’m broke and I can barely afford to keep the damn thing on the road. But if I just bought a $250,000 sports car (and believe me, I didn’t), that $200 isn’t really an effective deterrent any more. It’s such a small percentage of my income that I speed with impunity.
Sales tax works in an analogous way: you’re imposing the same costs across the board, but the value of those costs is different to different people.
6%??? Wow, in California, it’s 9.25%, and it’s up to 9.5% in some cities
I think that almost every state does this, and has been doing this for longer than I’ve been in existence.
@lilikoi I said California in my answer silly : )
California’s income tax ranges:
1.25% > $0
2.25% > $7,168
4.25% > $16,994
6.25% > $26,821
8.25% > $37,233
9.55% > $47,055
10.55% > $1,000,000 source
I live in Portland which is right on the border of Washington. People drive down all the time to buy stuff tax free. Washington has a sales tax and we don’t. This works great for people buying cars and boats.
oh, my bad, it’s up to 10.25% source
Here in Massachusetts, we pay a 5% Sales Tax on everything except food and an income tax.
Luckily, I live fifteen minutes from the New Hampshire border where there is no sales tax.
An income tax is a progressive tax, that is generally the more income, the greater the % of taxes.
Sales taxes are regressive, that is the lower your income, the greater the impact of the tax..
New York City sales tax is 8.875%, except for groceries and clothing under $110, of which 4% is NY state sales tax and the rest is what NYC tacked on. The rest of the state works the same way, so sales tax in say, Woodstock, could be 6.25% and in Oswego at 4% and so on.
Awww, I’m glad I’m moving back to AK. No sales tax. The price you see, is the price you pay.
That’s pretty much what we have now. I pay a flat tax on what I earn in IL, but sales taxes take a bigger bite, especially for families. Republicans have long argued that taxes should be based on consumption, not income, which would have the effect of distributing even more of the wealth upwards, as our current system already does. Aside from local property taxes and inheritance taxes, we have no means of taxing wealth in this country, and the stinking rich love it.
I think that states should abolish sales taxes altogether and institute a graduated income tax instead. Keep luxury taxes on big-ticket items, give the working poor a goddamned break. And oh, yeah, let’s start taxing the shit out of green fees at private country clubs. It ought to cost around 800 bucks to pay a round of golf in this country.
@Violet- In California it is 8.25%, not 9.25%. Apparently you are paying another one percent in local taxes. I pay 8.75% here in the state capital.
@johnpowell- I always thought it must be great for residents of Vancouver. They can drive across the bridge and do their shopping and still never pay any state income tax as Washington has none.
@AstroChuck please see my comment prior to this one. And click on ‘source’
The majority of the state is paying more than 8.25% now
If you don’t like the income tax where you live, move somewhere there is no income tax. It is up to you to choose where you live. I suspect you would complain just as much if everything you want to buy costs twice as much as it used to because of the tax.
California has both a sales tax and an income tax and still can’t balance the budget.
@YARNLADY was that directed towards me? Because I was not complaining about any tax I pay.
@YARNLADY
Lol@ California!
The poor state’s real problem is that there are millions of people taking from the system without contributing anything.
In the event that the first chunk of that comment were aimed at me, the poster, I’m not complaining.
@Violet No, just the question
@Nullo sorry, I took your question wrong Yes, I agree that is a problem with California, but the ones who could contribute always vote against any use taxes as well. I put the problem mainly on the misuse of the taxes we do pay. If the administration of the revenue was done properly, we would not be in this fix. The littany of fraud and cheating is sickening.
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