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View Diary: It's not 47% anymore (103 comments)

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  •  Sales taxes are regressive (1+ / 0-)
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    because non-rich people spend almost all of their income, much of it on sales-taxable items (some states exempt groceries and medicines, but some do not), while rich people spend (on personal consumption) very little of their income.  So 6 percent of 18,000 spent out of 10,000 net income is 108, which is 10 percent of income, while 6 percent of 1.8 million out of 100 million is 10,800, which is only 0.1 percent of income.

    Some years ago Florida tried to make services taxable, but it was opposed by newspapers (because subscribing to a paper is a service, while a paper bought from a newsstand or rack is a product), and it was repealed in less than a year.  The supporters had a good argument for it, however: that it would be LESS regressive than taxing only products.  For example, rich families hire a lawn service, while poor families buy a lawnmower and gasoline and cut the grass for themselves.  So taxing the bill from the lawn service would collect more from the rich customer.

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