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by PeterisP
3202 days ago
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A sales-only tax (i.e. taxing consumption) means that the burden of taxation is disproportionally shifted towards the poor. A poor person consumes almost 100% of their income; a very poor person consumes more than 100% of their income (by going into debt), an upper-middle class person consumes much less than 100% of their income (they get savings, some investments, and big expenses like student loans and mortgage don't count for sales taxes), and a very wealthy person consumes just a small part of their total income, as most of their spending is essentially buying control of means of production and control of other people, which is not consumption and not affected by sales tax. If all your spending is consumption, then all of that is taxable, and if much of your spending is to gain more income in the future (e.g. buying rent housing, or stock/control in companies) then that's tax-free - in essence it's a tax system that strongly facilitates a rich-get-richer, poor-stay-poor dynamic and increases inequality. And that's generally considered a bad thing for society. |
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* WA omits groceries, prescriptions, and rent from sales tax. So many of the actual necessities in life are already not impacted.
* No personal income tax drastically simplifies and shrinks the tax bureaucracy. According to the Seattle Times, the city's goal of taxing high earners will cost "10 million to $13 million to set up, plus $5 million to $6 million per year to manage and enforce". That isn't counting the overhead costs on the citizens themselves. This is all money that could more productively flow elsewhere.
* There seems to be an assumption that income taxes will drastically reduce the sales tax. But from my memories of living in both CA and NY don't really bear that up. If anything, these states all have problems with spending too much... more tax revenue is like giving alcohol to an alcoholic and just makes the problem worse.
* Income taxes give politicians another tool for pandering to special interests. In NY, one of my exes got a fixed tax deduction for classroom supply expenses because she was a teacher. That's neat, but there was no such tax-payer candy for my own professional expenses. And back then her salary quite a bit higher than mine. Not fair.
* (bonus!) We often tax things that we wish to disincentivize, such as cigarettes. If you accept the premise of anthropogenic global warming, then perhaps we should drastically jack up sales tax instead to reduce consumption, keeping the omitted categories above.