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It's true that most sales taxes are regressive, but you can have progressive sales taxes as well. A few examples: In New York, there's no tax on clothing and s

It's true that most sales taxes are regressive, but you can have progressive sales taxes as well. A few examples: In New York, there's no tax on clothing and shoes under $110 (at least that was the number when I lived there a few years ago). If you're buying stuff that costs more than that, then you can probably afford the tax, since there plenty of completely fashionable and functional items that cost far less. In many (most?) places, there's no sales tax on most foods you'd buy in a supermarket, but there is on prepared foods and restaurant meals. You could probably take these even further by raising the taxes on more expensive clothing items. If you're buying a $1,000 purse or eating a $500 meal, you can probably afford a higher tax rate. It would probably be challenging to apply a progressive sales tax to everything, but it's certainly possible for many purchases.

notahacker 12y ago
It is possible to make sales taxes that aren't massively regressive, and your examples are a lot better than most of the "progressive" consumption-only tax proposals (which generally revolve around giving a basic rebate and then taxing yachts and basic foodstuffs alike) But the bigger problem isn't the proportion of consumption being taxed, but that the very rich actually consume very little of their income (which implies higher taxes for everyone else). To be fair to Bill Gates, he also favours high taxes on intragenerational transfers of all that accumulated wealth and is busy giving his own self-made fortune away. But even then, consumption taxes miss one of the biggest, if not the biggest benefits to holding large amounts of wealth.... being able to choose exactly when, if and on what terms you spend your "work" time. A person who consumes $100k per annum in interest income from their professionally-managed wealth fund which is so big they never have to worry about their future is much, much better off in real terms than somebody spending a little over $100k from a salary they spend 50% of their waking hours earning not to mention many hours worrying about what would happen if they lost that job. Obviously the status quo income tax isn't ideal in that respect either, and ramping up tax on capital gains has the side effect of harming good companies' chances of getting funded, but that's why Piketty favours taxing the entire capital base rather than only capital which happens to be spent on luxury shoes or earning a decent return on investment.

notahacker 12y ago

It is possible to make sales taxes that aren't massively regressive, and your examples are a lot better than most of the "progressive" consumption-only tax proposals (which generally revolve around giving a basic rebate and then taxing yachts and basic foodstuffs alike) But the bigger problem isn't the proportion of consumption being taxed, but that the very rich actually consume very little of their income (which implies higher taxes for everyone else). To be fair to Bill Gates, he also favours high taxes on intragenerational transfers of all that accumulated wealth and is busy giving his own self-made fortune away. But even then, consumption taxes miss one of the biggest, if not the biggest benefits to holding large amounts of wealth.... being able to choose exactly when, if and on what terms you spend your "work" time. A person who consumes $100k per annum in interest income from their professionally-managed wealth fund which is so big they never have to worry about their future is much, much better off in real terms than somebody spending a little over $100k from a salary they spend 50% of their waking hours earning not to mention many hours worrying about what would happen if they lost that job. Obviously the status quo income tax isn't ideal in that respect either, and ramping up tax on capital gains has the side effect of harming good companies' chances of getting funded, but that's why Piketty favours taxing the entire capital base rather than only capital which happens to be spent on luxury shoes or earning a decent return on investment.