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MissDaisy1
Posted: Tuesday, March 26, 2013 10:08:12 PM

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Location: United States
Many municipalities, districts, and states are adding more sales taxes to fund their projects. In the past, property taxes and income taxes were used to finance governmental needs. Some areas of metro St. Louis charge sales taxes of 12%. The local fire district instituted a sales tax of 1/2% to pay for expenses. Typically, property taxes are used to finance the fire district.

Many argue that sales taxes are regressive and hurt the poor.

Should sales taxes be used to support the government or should we rely more on property/income taxes? If you take the side of sales tax, at what level should the government be prohibited from raising rates (ie 10%, 20%, 100%, unlimited)?
Ravyn
Posted: Wednesday, March 27, 2013 12:40:08 AM

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Location: Bend, United States
Living in Oregon, a state with no state sales tax, we have extremely high property taxes as well as our state income tax is very high. Some say its better to have sales tax and lower on the other two. With higher paying jobs out of the state, if one chooses to live here and work in a different state, you pay for it in more than one way back to this state. State sales taxes are certainly getting out of hand. Sales tax affects everyone who purchases something and lets face it, we all do that. Higher property taxes only affect those who purchase property/homes, which is a completely different topic for discussion. This will be an interesting topic to watch.

LadyX
Posted: Wednesday, March 27, 2013 8:41:35 AM

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Location: United States
I don't think there's any question that sales taxes are regressive. Theoretically, wealthy people buy more and higher-priced items and therefore pay more sales tax, but in practice, the percentage of wealth and assets used for monthly taxable expenditures is far, far higher for the working class. To give an extreme example, a man with a net worth of 250,000,000 will spend an infinitesimal percentage of his wealth on purchased items, even if you throw in a few high dollar vehicles. On the other hand, a single mom living paycheck-to-paycheck is literally running out of money every two weeks, or every month. Her grocery bill might be 25% of her total budget, especially if she has children. Mitt Romney's grocery bill will include many of the same items, but wouldn't make a dent in his monthly budget even if he fed the entire neighborhood for a month.
Guest
Posted: Wednesday, March 27, 2013 8:56:53 AM

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Joined: 12/1/2006
Posts: 470,086
MissDaisy1 wrote:
Many municipalities, districts, and states are adding more sales taxes to fund their projects. In the past, property taxes and income taxes were used to finance governmental needs. Some areas of metro St. Louis charge sales taxes of 12%. The local fire district instituted a sales tax of 1/2% to pay for expenses. Typically, property taxes are used to finance the fire district.

Many argue that sales taxes are regressive and hurt the poor.

Should sales taxes be used to support the government or should we rely more on property/income taxes? If you take the side of sales tax, at what level should the government be prohibited from raising rates (ie 10%, 20%, 100%, unlimited)?


Sales taxes are a matter of choice in spending (to a degree). I would limit the tax on sales to no more then 10 percent. As most sales taxes sunset because they were enacted to pay for some kinds of special projects, the voters and income earners should be sure they do in fact sunset.

Every tax hurt the poor.
ByronLord
Posted: Wednesday, March 27, 2013 8:58:18 AM

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Location: Massachusetts, United States
Sales taxes are beyond question regressive and especially so in the US where due to an oddity in the way mail order sales are taxed, Internet sales are considered to be 'tax free'. According to the states they are not but almost nobody pays the taxes due on their Amazon purchases.

I spend more at Amazon each month than the rest of my shopping put together. And most of my in-state purchases are of exempt items like food. So even though the sales tax and the income tax in my state are roughly the same on paper, I pay more than ten times as much in income tax than sales tax.

The right loves sales taxes because their whole goal is to provide the largest return possible for their shareholders while bilking the rubes who vote for them. Glenn Beck's goal is to sell as many gold coins as possible for at least twice the melt down value. Clarence Thomas wants his wife Ginny to collect as much in consulting fees from the companies he works for on the court. Karl Rove wants to keep that river of gold from Adleson and the Koch brothers flowing through his coffers so that he can divert as much as possible into his pocket in management fees.

All the talk of the trilateral commission and black helicopters and such is all just deliberately crazy talk to discredit the notion of conspiracy theories as stupid and far fetched. Meanwhile they rob blind the rubes who vote for them and spend their time trying to get elected.

Guest
Posted: Wednesday, March 27, 2013 9:01:01 AM

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"Higher property taxes only affect those who purchase property/homes, which is a completely different topic for discussion." to a point

higher property taxes affect renters, as that goes up so does the cost of renting, the land owner has to make bills too.

I never felt no matter where I have lived in the USA, that I was ever tax too little. How about we go the next 30 years with the Gov't at all levels living on less so we all can keep more of what we earn thru our labor.
Guest
Posted: Wednesday, March 27, 2013 9:03:37 AM

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The right loves sales taxes because their whole goal is to provide the largest return possible for their shareholders while bilking the rubes who vote for them. " LB

do tell , how does a business that collects the tax make a profit ?
Guest
Posted: Wednesday, March 27, 2013 9:15:53 AM

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Joined: 12/1/2006
Posts: 470,086
Her grocery bill might be 25% of her total budget" Unlikely

Do the Poor Pay More for Food?
Item Selection and Price Differences Affect
Low-Income Household Food Costs
. By Phillip R. Kaufman, James M. MacDonald,
Steve M. Lutz, and David M. Smallwood. Food and Rural Economics Division,
Economic Research Service, U.S. Department of Agriculture. Agricultural
Economic Report

Guest
Posted: Wednesday, March 27, 2013 9:17:24 AM

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Joined: 12/1/2006
Posts: 470,086
MotherJones is a good voice on this issue.


America Spends Less on Food Than Any Other Country

—By Alyssa Battistoni
| Wed Feb. 1, 2012
LadyX
Posted: Wednesday, March 27, 2013 9:25:35 AM

Rank: Thread Mediator

Joined: 9/25/2009
Posts: 4,655
Location: United States
Shaffer wrote:
Unlikely




I've been in a household where the food was a giant portion of the budget, especially with gaps in government assistance. You can quibble with the percentages if you'd like, but monthly food and household costs hit poor/working families hard. The same is not true of the wealthy.

Welcome back, Buc. :)
Guest
Posted: Wednesday, March 27, 2013 9:44:26 AM

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Joined: 12/1/2006
Posts: 470,086
Every tax hurt the poor. ,,, I said this earlier. And I am not about to argue with anyone that has found themselves in "need" for Government assistance. I do know thru my business dealings that most National Food retailers run their best food sales from the 20th of the month thru the end of the month, why, because the SNAP cards are less full at that point and the poor are less likely to shop later in the month. I find this abhorrent.
Rembacher
Posted: Wednesday, March 27, 2013 9:54:41 AM

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Joined: 10/16/2008
Posts: 1,101
As a single male university student I spend roughly 17% of my budget on food if I eat at home every meal. If I go out at all, that number climbs, so I'm sure LadyX's 25% number isn't too far off for a woman with children.

In Ontario, we've seen the sales tax drop from 15 to 13% due to the federal government reducing its portion of that tax. This may seem extremely regressive to some of you, but I think our society has found a good way to balance that. There are no taxes on unprepared food items. Food from a restaurant is taxed, but food from a grocery store is not. This way struggling families aren't hit with added costs for items they need to survive.
seeker4
Posted: Wednesday, March 27, 2013 10:06:48 AM

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Location: In the great, beautiful Cosmos, Canada
Rembacher wrote:
As a single male university student I spend roughly 17% of my budget on food if I eat at home every meal. If I go out at all, that number climbs, so I'm sure LadyX's 25% number isn't too far off for a woman with children.

In Ontario, we've seen the sales tax drop from 15 to 13% due to the federal government reducing its portion of that tax. This may seem extremely regressive to some of you, but I think our society has found a good way to balance that. There are no taxes on unprepared food items. Food from a restaurant is taxed, but food from a grocery store is not. This way struggling families aren't hit with added costs for items they need to survive.


Sales tax in Canada is a funny beast. Every province except Alberta has it (provinces are not allowed to directly tax income, though most have a provincial income tax that is collected for them by the Feds, so they have to use income and property taxes) and then we have a Federal sales tax (5%). In some provinces, such as Ontario where Rembacher and I live, the provincial sales tax is harmonized with the federal sales tax to create a single tax (13% in Ontario, 5% to the Feds, 8% to the province). In others, they are charged separately though the Feds have made it clear that they want harmonization to be the norm. Sigh. Confederation is wonderful when it works.

There are pluses and minuses to the this system. The exemptions for things like unprepared foods and some children's things (like baby clothes and diapers) keep the sales tax from being too onerous on those who are living with less keeps it focussed more on being a consumption tax. It is easier for ordinary people than income tax. You just pay your extra 13% and you're done. No returns to file or credits and refunds to fritter with. For merchants, of course, it's another matter, esp. in health care where we have to be careful about what is exempt and what isn't (not always easy, I'm afraid). OTOH, in a world where we should really be consuming less, do we want our government programs dependent on consumption?

Income tax has it's problems, too. The patchwork of credits and deductions that has built up over the years (I hear the US tax code is similar) needs to be streamlined and simplified. Just doing that streamlining might help us lower tax rates. One of the reasons loopholes exist is simply that a complex system that is somewhat cobbled together isn't very efficient and inevitably gaps open up.

In the end, we need to decide exactly what government should be doing, exactly how much we are willing to pay for it, and then build an appropriate tax system.

Mendalla


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Guest
Posted: Wednesday, March 27, 2013 10:06:50 AM

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I definitely support sales tax on luxury items, but I think things necessary for life, like food from the grocery store, should be exempt. Progressive income taxes and property taxes are definitely more equitable. If you think it's hard to live wealthy, you have the option of simply giving all your money to the poor and living as they do, instead, and avoiding all those onerous taxes you dislike so greatly.
Guest
Posted: Wednesday, March 27, 2013 10:14:35 AM

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MatthewVett, is your goal to remain poor?
lafayettemister
Posted: Thursday, March 28, 2013 7:39:59 AM

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The advantage of sales tax is that everyone contributes to the coffers. Property tax is usually raised for a specific purpose, ie... education, infrastructural improvements, public transportation, etc. Those kinds of taxes are often regressive. Many properties paying property tax are business and rental property. Their tax goes up, they raise the rent or cost of services/goods sold.

Increases in property taxes are usually put on a ballot at election time. This is a bit unfair, IMO. Imagine two items on a ballot...

1. 1% increase in state income tax for all citizens. Proceeds will raise tens of millions of dollars for public schools statewide.
2. 1% increase in property tax for all property owners. Proceeds will raise tens of millions of dollars for a Dodo Bird sanctuary.

Item #1 will be soundly defeated because few people will want to take home less money for the same amount of work. Everyone voting will have a vested/personal interest in keeping their own money.
Item #2 will probably pass. Most of the property owners will vote against, most non-property owners will vote for it. Those without the vested/personal interest of losing money will be more eager to spend someone else's money even for something stupid. More free money.

An example, the capital city near where I live recently passed a property tax increase. The money was to go to the public transit system that had been hemorraging money. In a city around 230k people, less than 3% use public transportation. Yet the business and property owners are made to pay more taxes to pay for the system they'll never use, nor does 97% of the rest of the city.

Anytime a tax is passed because "they can afford it", and "they" isn't everyone, it will be regressive. Because "they" would rather decide for themselves what "they" can afford. Most property owners aren't filthy rich. Many are single moms/dads or families. Parents making an honest living, living above their means like all of America. They may live in a $150k-$200k home, while feeding 2 or 3 kids sending them to school (maybe private school) driving a reasonable car, living paycheck to paycheck. Or just barely ahead of the game. Like most Americans, one catastrophe like losing a job or serious illness, and they could lose everything. All the while, they're paying a higher tax rate than those that make less, so they're already paying their fair share. The more you make, the more you pay. Having just paid my property tax I can tell you, counting all the personal, business, employee, and property taxes I've paid, my rate is just below 60fucking%.

If the goal of taxes is to raise enough money to pay for shit, then it stands to reason to me that the more people that pay into the system, the more money that will be earned. Very low income families are probably already receiving food stamps and won't pay the sales tax increase on food items anyway.

A 1% increase in sales tax is miniscule. One whole dollar per $100 spent. My local sales tax is 5% for county and 4% for state. Last year the county collected $142Million in sales tax. I don't know the gross sales number, and math isn't my strong suit. If the sales tax were raised 1%, there'd be another $15M-$16M in county funds.

Both property and sales tax should be used appropriately. Neither should be over utilized nor under utilized based strictly on whom can afford to pay or not pay either.





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LadyX
Posted: Thursday, March 28, 2013 8:45:32 AM

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lafayettemister wrote:


Anytime a tax is passed because "they can afford it", and "they" isn't everyone, it will be regressive.


Actually, no. In fact, taxes that place bigger rate and percentage burden on higher incomes are progressive. Those terms don't have anything to do with whether a tax is universally affordable.

Generally, I agree: no single type of tax should be used in excess.
LYFBUZ
Posted: Friday, March 29, 2013 9:40:35 PM

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Sales taxes are regressive but exempting items like food helps. Ideally tax legislation would be simplified and administrative costs to government, individuals and businesses lessened. Unfortunately governments have a history of spending beyond their means so now the bill is coming due. So, we are seeing "tax creep" everywhere...The regressive impact on lower income families can be lessened with tax credit programs..but the resulting bureaucracy just eats up more tax dollars. Government needs to simplify.
Buz
Posted: Friday, March 29, 2013 11:20:11 PM

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Georgia is suing Amazon right now over sales taxes not paid.

There is also extensive taxes added on to beer & alcohol, and gasoline. We probably are paying more in taxes on a beer than is actually going to the brewery or the retail establishment. Of course cigarettes are vastly taxed also.

Another way municipalities get income is through traffic fines. Many have found it profitable to add to their police force and instruct them to write as many tickets as possible. of course that hits poor people the worst. They are more likely to have malfunctioning brake lights, etc, cars that are not in good shape, therefore making them targets for the police. Plus it is ridiculous for police to deny that they don't profile. Many municipalities are asking their municipal court judges to charge double and triple the fines they had been charging. They can legally do that. So running a stop sign might just cost you a $25 fine in one town but be $75 in the next town.

In Georgia the voters just recently heavily voted down a SPLOST statewide sales tax. That infuriated the politicians who threatened to start setting up toll roads and such to get the money for their pet projects. Evidently, the professional pollsters didn't see that vote rejection coming and had told the politicians to expect a victory.

As for as property tax, that is mostly used to fund public schools here and applied by counties and cities. Instead of taking the heat and raising the actual tax they raise the millage rate (which does the same thing) and hope to sneak that by the tax payers. Another property tax gimmick is to over value your home & property, thus you pay more in taxes. If you are alert to that you can challenge their property appraisal and you will probably win.



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ByronLord
Posted: Saturday, March 30, 2013 9:32:40 AM

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Guest wrote:
The right loves sales taxes because their whole goal is to provide the largest return possible for their shareholders while bilking the rubes who vote for them. " LB

do tell , how does a business that collects the tax make a profit ?


The GOP runs as a business. Koch brothers give them money, they pass bills to lower their taxes and let them do whatever they like to the environment. It is known as transactional lobbying. Sheldon Adelson is the same, he faced possible jail for the bribes he paid to set up a casino in China. Giving $200 million to the GOP made the prosecutors back off lest they be accused of retaliating.

The Koch Bros and their ilk love the idea of a switch to a sales tax as it would reduce their taxes at the cost of everyone else. Romney has already managed to reduce his tax bill to 15% and you can be sure the rest of the GOP shareholders are the same.

Meanwhile the Republican politicians think that all they need to do is find another group for elderly white men to hate and they can maybe win another election cycle. Only that has stopped working. It is no longer OK to hate Latinos or Gays.

adagio_sabadicus
Posted: Wednesday, September 11, 2013 11:27:57 PM

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I'm not an economist but I think the US should do away with Income Taxes and have a National Sales Tax on every thing but food and health care. Forget about April 15th then.
Melman
Posted: Thursday, September 12, 2013 12:08:43 PM

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Many argue that sales taxes are regressive and hurt the poor.

Should sales taxes be used to support the government or should we rely more on property/income taxes? If you take the side of sales tax, at what level should the government be prohibited from raising rates (ie 10%, 20%, 100%, unlimited)?

What hurts the poor is the lack of jobs, education and willingness to work, not just be a place holder in a job. Laffer Curve dictates that taxes will rise to a level that it is no longer viable to work, thus the economy we are currently in, in the managed decline of the USA. I personally like the sales taxes more then I like property or income taxes. ALL Taxes are too high, but, to run all govt we need some taxing of the Productive Class, the other problem is we in the USA have a newly constituted "Chattel Class".
SITTING
Posted: Monday, September 16, 2013 2:31:50 AM

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VAT (the equivalent of sales tax in the UK) is currently at 20%. It's a joke, basically and that's why so many people are constantly evading taxes. The people who get hit hardest are the small business owners - once revenue hits a certain limit (around 70,000 pounds) you automatically have to start paying VAT. And then once you've paid that, you get taxed in what's left in terms of profit at the year end. If VAT was at about 10% so many more people would pay what they had to and the whole system would be fairer and mroe successful.

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