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Sales tax is a regressive tax which affects the poor more, so operating on pure ideology a left wing government would want to cut sales tax and replace with hig
by Macha 4y ago
Sales tax is a regressive tax which affects the poor more, so operating on pure ideology a left wing government would want to cut sales tax and replace with higher income tax.
However even the left wing EU governments that exist don't have unlimited time and goodwill, so most of them will leave that alone rather than get the bad PR from raising more visible taxes or cutting services to compensate.
- vmilner 4y agoYes - certainly the Uk experience in the Thatcher era was to reduce income tax by increasing sales taxes. (The overall tax burden for the average family increased slightly over Margaret Thatcher’s administration). Subsequent labour governments didn’t/couldn’t reverse the process.
- arlort 4y agoReferring to VAT as a less visible tax is ... a take, consumption taxes are around 20% of total tax income in the OECD, you'd have to tax income a lot more to make up for that, it's not really viable. (Income and profit taxes currently make up 33% for comparison) And the effects on lower incomes gets mitigated by transfers and support programs and that tends to be good enough for left leaning legislatures