Or, of course, to shift the tax burden from investment to consumption...
Except, the poor have no choice but to consume (we all have to consume SOMETHING), and nothing to invest (because they've spent all their little money).
If you have to increase the sales tax, at least exempt necessities such as food and shelter. But the initial story posted here indicated they were going to END such an exemption.
------------------------------------------------------------------------ ----------
Tom Beck
So first your are for keeping property taxes, now you want to eliminate them? Sounds like a Kerry backer. <joking> But maybe you mean rent should be deductible? Against state or federal income? Both? Sales tax on a house purchase can be claimed against federal income taxes.
Actually what I referred to was tax on clothing which could equal shelter, a basic need.
As far as food goes, cooked food is now taxed as well as some liquids. (Milk and water are not taxed here). The people who want to lower the tax have a study that says on average out of 21 meal times a week only 6 use home cooked food, i.e. was not taxed. So if the overall tax is reduced from 6 to 4% and the store bought food is now taxed, the person saves 20%. (Not making any claims about that data, just passing it along. In fact if the number was 7 out of 21, there would be no gain, and a loss if they use more home food.)
The true measure would be overall household spending. The first site I found had NZ data from 1999 and another from Cincinnati. Clothing and food accounted for 20 to 28% of household spending. (Minus rent/mortgage; there are probably other services that aren't taxed.). The poorer did spend higher for them, but the highest was in the low middle range. However, a household would have to spend more than 33% on food and clothing for the sales tax change to be bad. I will agree right here that the poorest may be doing just that, but would also assume that they are getting other assistance.
Hmmm, now I'm confused. The people pushing this plan say there'd be enough savings to eliminate property taxes. How can this be if everyone is spending less? I don't know, but their other point's are: consumption tax catches (almost) everyone (vs income tax), easier enforcement, and easier to apply.
Kevin T. - VRWC
I need more data
_______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
