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Sales taxes are also a regressive tax. Low income households and those living paycheck to paycheck end up paying as a proportion of their income far more than h

by objclxt 11y ago

Sales taxes are also a regressive tax. Low income households and those living paycheck to paycheck end up paying as a proportion of their income far more than high income households, since they consume more relative to the money coming in (and there's no exemption or deduction).

15155 11y ago
I was going to comment this as well. OR has no sales tax, everyone goes crazy about it, yet they have one of the highest income taxes in the nation. Even for the poorest, it's very difficult for that to be a good bargain.
- bhayden 11y ago
  I moved from a state with no income tax and a sales tax to Oregon. I don't make six figures and I definitely pay more in OR state income tax than I did in sales tax in my previous state.
  - 15155 11y ago
    6-8% of taxable expenditures, by definition, will equal less than the equivalent state income tax. Even if you spend every dime you make, your expenditure will almost never be completely sales-taxable (in our current system). The national, tax-everything sales tax doesn't tax idle money. People with money have lots of it and can spend it non-domestically.
    - maratd 11y ago
      > The national, tax-everything sales tax doesn't tax idle money. There's no such thing as idle money. As soon as you deposit it in a bank, it gets loaned out to someone else who spends it. > People with money have lots of it and can spend it non-domestically. Even now, you're obligated to report any purchases made outside the jurisdiction and pay sales taxes on that yourself. I'm not suggesting we abolish the IRS. They should still be around and do audits and enforce the law, especially in such cases.
    - dragonwriter 11y ago
      > 6-8% of taxable expenditures, by definition, will equal less than the equivalent state income tax. Not true; actual state income tax isn't its nominal rate on all income (state income tax usually starts with AGI and then has state deductions and credits). So 6-8% on some subset of expenditures may be more, equal, or less than 6-8%on subset of income. Heck, its not even true without considering that; it would be -- without considering that income tax excludes some income in the same way that sales tax excludes some expenditures -- if expenditures had to be less than income, but its possible to run a deficit as long as your income is sufficient to pay the increasing debt service cost, which (particularly with an increasing income over time) can be an arbitrarily long period of time.
maratd 11y ago
> Low income households and those living paycheck to paycheck end up paying as a proportion of their income far more than high income households This is false. Food and clothing is exempt from sales tax. At least it is in my state and that's how it should be. If they're genuinely poor, that's what they're spending their money on, so they wouldn't get taxed at all.

by objclxt 11y ago

15155 11y ago

I was going to comment this as well. OR has no sales tax, everyone goes crazy about it, yet they have one of the highest income taxes in the nation. Even for the poorest, it's very difficult for that to be a good bargain.

bhayden 11y ago
I moved from a state with no income tax and a sales tax to Oregon. I don't make six figures and I definitely pay more in OR state income tax than I did in sales tax in my previous state.
- 15155 11y ago
  6-8% of taxable expenditures, by definition, will equal less than the equivalent state income tax. Even if you spend every dime you make, your expenditure will almost never be completely sales-taxable (in our current system). The national, tax-everything sales tax doesn't tax idle money. People with money have lots of it and can spend it non-domestically.
  - maratd 11y ago
    > The national, tax-everything sales tax doesn't tax idle money. There's no such thing as idle money. As soon as you deposit it in a bank, it gets loaned out to someone else who spends it. > People with money have lots of it and can spend it non-domestically. Even now, you're obligated to report any purchases made outside the jurisdiction and pay sales taxes on that yourself. I'm not suggesting we abolish the IRS. They should still be around and do audits and enforce the law, especially in such cases.
  - dragonwriter 11y ago
    > 6-8% of taxable expenditures, by definition, will equal less than the equivalent state income tax. Not true; actual state income tax isn't its nominal rate on all income (state income tax usually starts with AGI and then has state deductions and credits). So 6-8% on some subset of expenditures may be more, equal, or less than 6-8%on subset of income. Heck, its not even true without considering that; it would be -- without considering that income tax excludes some income in the same way that sales tax excludes some expenditures -- if expenditures had to be less than income, but its possible to run a deficit as long as your income is sufficient to pay the increasing debt service cost, which (particularly with an increasing income over time) can be an arbitrarily long period of time.

maratd 11y ago

> Low income households and those living paycheck to paycheck end up paying as a proportion of their income far more than high income households This is false. Food and clothing is exempt from sales tax. At least it is in my state and that's how it should be. If they're genuinely poor, that's what they're spending their money on, so they wouldn't get taxed at all.