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by prepend 1047 days ago
Yes and no. The “poor” may very little to no income tax. But the poor pay sales tax on almost everything they buy and that’s a flat 7-12% and so is really regressive. Although this is skipped for items paid for with government food assistance (eg, SNAP).

And if you’re working poor (ie making $20k/year) you’re paying 7.5% in payroll taxes to cover social security and Medicare. This is also flat and so regressive.

You certainly pay less percentage and less absolute taxes than the rich, but it’s still something.

The challenge is that it’s hard to reduce these taxes any lower. Unless you want to change social security to a straight income redistribution program and not the pretend pension it is now and do something like the first $50k isn’t taxed and 10x the taxes on people from 50-200k (currently only 0-168k is taxed but almost half of people only make 50k so taking off the bottom drastically reduces tax revenue).

Or you could remove sales tax on people who make less than $20k but that’s hard to monitor properly and rebates don’t help much with day to day needs.

Tl:dr; the poor pay taxes, but not that much.

1 comments

>the poor pay sales tax on almost everything they buy . . . Although this is skipped for items paid for with government food assistance (eg, SNAP).

That is technically correct, but misleading, because even when it is not paid for by government food assistance, the sale of food is not taxed--at least, it is not in any of the 4 US states I've lived in.

Lots of food in my state is taxed. I’m not sure how they determine what is taxed and isn’t as the cashier does it all for you automatically. But I think things like fruit and diapers are not taxed, but processed foods are.

But I think the important part is that poor people spend a larger percent of their income on things with sales tax than wealthy so sales tax impacts them more significantly. Thats what I meant t saying it’s regressive [0].

[0] https://www.accuratetax.com/blog/regressive-sales-tax-infogr...

Are you sure the basic rule isn't that if the food it is intended to be consumed at the seller's place of business, it is taxed? That's how it works in California. (As an exception, carbonated beverages are taxed.)

Specifically, food from the "hot bar" in a supermarket is taxable, whereas a can of ravioli for instance, is not taxable even though it is a processed food by almost anyone's definition.

I just looked it up and groceries are a lower rate (1% instead of 4%) from the state but there are local sales taxes of 2-5% depending on city and county.

Prepared food like the food bar is full sales tax.

Huh. I am suprized that voting to tax food wasn't political suicide for the state legislators.