Given that the lower and middle classes pay a disproportionate amount of income tax, with no mechanisms to avoid a tax before the paycheque even arrives, I think this is a net win.
Given that the lower and middle classes pay a disproportionate amount of income tax…
Not only is that not a “given”, I’d argue that you’re completely wrong. One doesn’t have to look very hard to find out how much income tax is paid by lower class: effectively zero.
A consumption tax would affect the lower class more than the 1% for two main reasons:
1. Non-discretionary spending as a percentage of income is much larger for the lower (and middle) classes, who spend 100% or near 100% of their income on “essentials” like food and shelter.
2. The tax itself is obscene- 30% or thereabouts. As others have pointed out, the poorest of the poor don’t pay any income tax, and many essentials (like unprepared food) are not currently taxed. I don’t recall if the bill would add a tax on unprepared food. I wouldn’t be surprised if it does.
There are about 10 that still charge taxes on groceries, but are considering phasing them out.
Shelter is always tax exempt. There is no tax on rent. Mortgages, if anything, come with a tax rebate, as amounts paid can be claimed against collected income taxes.
You did not read your own linked page: food that are already heated-up and ready to eat are taxable, but most foods are not. Whether it is a whole food or a processed food products with many ingredients does not matter. Also, NY taxes soft drinks and other unhealthy foods (but most states do not).
Also, you are wrong when you wrote, "Given that the lower and middle classes pay a disproportionate amount of income tax".
In fact, most Americans who earn under about $40,000 a year pay no federal income tax. I believe the vehicle that effects this outcome is mainly the earned income tax credit.
- Clothes
- Shoes
- Plumber/Electrician/Handyman
- School supplies (though some states have tax holidays)
- Gas/public transit
- Car maintenance
- Utility bills
Not only is that not a “given”, I’d argue that you’re completely wrong. One doesn’t have to look very hard to find out how much income tax is paid by lower class: effectively zero.