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I'd be interested to hear your reasoning for why you think sales tax is so bad. Personally I see it as one of the more reasonable ways of taxing people, as for

I'd be interested to hear your reasoning for why you think sales tax is so bad. Personally I see it as one of the more reasonable ways of taxing people, as for every product sold the government/society had a part in making the sale of the product possible.

mikepurvis 7y ago
It's regressive because poor people spend a greater proportion of their income (like, all of it) on retail purchases, so they pay the rate (13% currently) on all their income. Where middle and upper class people who sit on money, invest it, whatever pay a much lower effective rate.
- Fjolsvith 7y ago
  It is called opportunity. Poor people in America are not forced to remain poor. They can (and do) improve their lot in life, and take advantage of being not poor like the other not poor people.
  - deleted 7y ago
    [deleted]
  - unreal37 7y ago
    I am not going to downvote you, but that's just not always correct. Plenty of people have come from nothing to become billionaires. (Oprah!) But plenty of people are trapped in a situation and can't just remove themselves from those traps. Not everyone can learn Python and make $65 per hour by next week. Let's have empathy for people who really want to do better but can't, and see if we as a society can help them.
    - stallmanite 7y ago
      I think it’s an ugly undercurrent lately where everybody has to be super exceptional/motivated/passionate/etc or they’re worthless and deserve to be discarded by society. Every member of an animal population can’t be exceptional. Are we just doing eugenics rube-goldberg style?
- eitland 7y ago
  Around here VAT is split so you pay full VAT on general things and services, half VAT on food and no VAT on electrical vehicles (for now I think).
- itcrowd 7y ago
  I don't understand your point. Even the rich will have to pay 13% once they spend the money.
  - danaris 7y ago
    But they won't. Spend it, I mean. At least not on things where VAT is relevant. Most people, when money comes in, they spend it on things, so it immediately has to also pay VAT. If they're lucky, they may have some savings, but it's going to be on the order of 2-3 months' worth of income. Rich people make orders of magnitude more money, and mostly need to spend the same order of magnitude to live as the rest of us. The money beyond that, they mostly don't spend on the same kinds of things. After all, what would you do with a million dollars' worth of soap? There's no VAT on lobbying, on buying a house in the Caymans, on hiring six people to clean the mansion. VAT, like all consumption taxes that aren't highly targeted, is hugely regressive.
    - itcrowd 7y ago
      > But they won't. Spend it, I mean. At least not on things where VAT is relevant. If we can agree that the VAT is levied because the government has added some value to each product sold (value added tax..) then I don't see why spending money on VAT-exempt items makes VAT a bad tax. If you spend it on labor, housing, there are taxes associated with that other than VAT. Lobbying and charities might be tax-deductible or exempt, that is another discussion. I think your point is that regressive taxes are bad, is that a fair analysis? I don't agree with that.
      - danaris 7y ago
        I mean, I believe that regressive taxes are bad. My point, however, is merely that VAT is a regressive tax.
        itcrowd 7y ago
        I agree it is a regressive tax. Re-reading my comment I can understand that it may seem that I don't agree with that. Sorry about that. However, I fail to see why regressive taxes are bad in general and why VAT is bad in particular. I was originally interested in the question by someone else before me: > I'd be interested to hear your reasoning for why you think sales tax is so bad.
eitland 7y ago
Probably intentionally misunderstanding but bear with me: Sales tax is bad because it is not on the sticker. Guess my and every europeans surprise when we realize that what we have to pay not the sum of the prices on the goods we buy, but that sum plus some more. VAT is a whole lot more reasonable as the price on the sticker is the price you pay is the sum of the prices on the stickers ;-) That said: VAT seems kind of reasonable to me but I will be happy to hear why ut isn't.
- chongli 7y ago
  It’s regressive because rich people pay a smaller total percentage of their income in VAT, compared to poor people. That’s the definition of a regressive tax. Progressive taxes flip that trend. A land value tax is progressive because rich people tend to own more land and thus end up paying more tax, percentage-wise, than poor people.
  - evanpw 7y ago
    The progressive / regressive terminology takes it for granted that income is the right denominator to measure against, rather than consumption, which is not obvious in my opinion.
    - chongli 7y ago
      Are you implying that consumption is a bad thing and we should discourage it? That would put consumption taxes in the category of Pigovian taxes [1] in your eyes. If that is the case, and other sales tax supporters agree with you, then it's not obvious from this discussion. In my experience, it's generally been the case that rich people are anti-consumption, at least on a personal level. Poor people often splurge on luxuries to relieve some of the pressure of grinding poverty. They buy things to signal status in order to attract a partner. A sales tax on luxuries like this is effectively a wealth transfer from the poor to the rich, not altogether dissimilar to government-run lotteries which fund scholarships. [1] https://en.wikipedia.org/wiki/Pigovian_tax https://en.wikipedia.org/wiki/Pigovian_tax

mikepurvis 7y ago

It's regressive because poor people spend a greater proportion of their income (like, all of it) on retail purchases, so they pay the rate (13% currently) on all their income. Where middle and upper class people who sit on money, invest it, whatever pay a much lower effective rate.

Fjolsvith 7y ago
It is called opportunity. Poor people in America are not forced to remain poor. They can (and do) improve their lot in life, and take advantage of being not poor like the other not poor people.
- deleted 7y ago
  [deleted]
- unreal37 7y ago
  I am not going to downvote you, but that's just not always correct. Plenty of people have come from nothing to become billionaires. (Oprah!) But plenty of people are trapped in a situation and can't just remove themselves from those traps. Not everyone can learn Python and make $65 per hour by next week. Let's have empathy for people who really want to do better but can't, and see if we as a society can help them.
  - stallmanite 7y ago
    I think it’s an ugly undercurrent lately where everybody has to be super exceptional/motivated/passionate/etc or they’re worthless and deserve to be discarded by society. Every member of an animal population can’t be exceptional. Are we just doing eugenics rube-goldberg style?
eitland 7y ago
Around here VAT is split so you pay full VAT on general things and services, half VAT on food and no VAT on electrical vehicles (for now I think).
itcrowd 7y ago
I don't understand your point. Even the rich will have to pay 13% once they spend the money.
- danaris 7y ago
  But they won't. Spend it, I mean. At least not on things where VAT is relevant. Most people, when money comes in, they spend it on things, so it immediately has to also pay VAT. If they're lucky, they may have some savings, but it's going to be on the order of 2-3 months' worth of income. Rich people make orders of magnitude more money, and mostly need to spend the same order of magnitude to live as the rest of us. The money beyond that, they mostly don't spend on the same kinds of things. After all, what would you do with a million dollars' worth of soap? There's no VAT on lobbying, on buying a house in the Caymans, on hiring six people to clean the mansion. VAT, like all consumption taxes that aren't highly targeted, is hugely regressive.
  - itcrowd 7y ago
    > But they won't. Spend it, I mean. At least not on things where VAT is relevant. If we can agree that the VAT is levied because the government has added some value to each product sold (value added tax..) then I don't see why spending money on VAT-exempt items makes VAT a bad tax. If you spend it on labor, housing, there are taxes associated with that other than VAT. Lobbying and charities might be tax-deductible or exempt, that is another discussion. I think your point is that regressive taxes are bad, is that a fair analysis? I don't agree with that.
    - danaris 7y ago
      I mean, I believe that regressive taxes are bad. My point, however, is merely that VAT is a regressive tax.
      - itcrowd 7y ago
        I agree it is a regressive tax. Re-reading my comment I can understand that it may seem that I don't agree with that. Sorry about that. However, I fail to see why regressive taxes are bad in general and why VAT is bad in particular. I was originally interested in the question by someone else before me: > I'd be interested to hear your reasoning for why you think sales tax is so bad.

eitland 7y ago

Probably intentionally misunderstanding but bear with me: Sales tax is bad because it is not on the sticker. Guess my and every europeans surprise when we realize that what we have to pay not the sum of the prices on the goods we buy, but that sum plus some more. VAT is a whole lot more reasonable as the price on the sticker is the price you pay is the sum of the prices on the stickers ;-) That said: VAT seems kind of reasonable to me but I will be happy to hear why ut isn't.

chongli 7y ago
It’s regressive because rich people pay a smaller total percentage of their income in VAT, compared to poor people. That’s the definition of a regressive tax. Progressive taxes flip that trend. A land value tax is progressive because rich people tend to own more land and thus end up paying more tax, percentage-wise, than poor people.
- evanpw 7y ago
  The progressive / regressive terminology takes it for granted that income is the right denominator to measure against, rather than consumption, which is not obvious in my opinion.
  - chongli 7y ago
    Are you implying that consumption is a bad thing and we should discourage it? That would put consumption taxes in the category of Pigovian taxes [1] in your eyes. If that is the case, and other sales tax supporters agree with you, then it's not obvious from this discussion. In my experience, it's generally been the case that rich people are anti-consumption, at least on a personal level. Poor people often splurge on luxuries to relieve some of the pressure of grinding poverty. They buy things to signal status in order to attract a partner. A sales tax on luxuries like this is effectively a wealth transfer from the poor to the rich, not altogether dissimilar to government-run lotteries which fund scholarships. [1] https://en.wikipedia.org/wiki/Pigovian_tax https://en.wikipedia.org/wiki/Pigovian_tax