7 ms·
One of the great benefits of sales tax is that all forms of income get taxed. There are no shelters from consumption taxes collected at point of sale.
by mbostleman 6y ago
One of the great benefits of sales tax is that all forms of income get taxed. There are no shelters from consumption taxes collected at point of sale.
- csw-001 6y agoGood point. Although it's not a flawless solution. It's a good solution to the extent you can't practically shift your consumption to a different jurisdiction (or nation) that doesn't tax the sale of the item. Tricky part becomes capturing consumption tax at customs for items purchased elsewhere to dodge taxes. When you think about the large purchases you can make elsewhere and import with relative ease (like an expensive car) versus the things that can't practically be purchased elsewhere (like groceries), a consumption tax can end up looking regressive. I am a fan of a consumption tax that doesn't kick in until you are over a certain level of spending, so if you consume below a taxable minimum you pay nothing. It's hard to imagine how this would be administered in real life.
- gwbas1c 6y agoFor things like cars, you have to provide documentation that you paid the tax when you registered the car. On the other hand, it's really worth it to drive across state lines when making a $2-3000 purchase.
- toomanybeersies 6y agoThe disadvantage is that sales taxes tend to be particularly regressive. If you earn $15k a year, chances are almost all of that goes towards consumptions (i.e. sales taxable spending).