[jshorty]

I may be missing some nuance here, but wouldn't increasing sales tax (as the Silicon Valley Leadership Group is advocating) further disproportionately punish lower-income residents? The article doesn't make clear whether moving towards a "Manhattan-like megalopolis" would be a positive or negative trend, but this would push it further down that road.

[r0fls]

From my limited understanding of economics: yes. The reason is that lower income people spend more of their money on necessities, whereas richer people spend more money on luxury goods (things they don't need), and they could hence respond more to an increase in sales tax (that is, spend less as a fraction of their income). To reiterate, the lower income people can't spend less (they're buying necessities), so the increase will cause them to spend a greater total fraction of their wages. So, when compared to an increase in income tax, an increase in sales tax is theoretically far more regressive.