Sales tax can be made progressive by not taxing food & clothing, an approach
that PA has taken (NJ also??). Thus those in the lower income brackets, who
spend most of income on essentials are less 'taxed'.
It is also possible to establish a indexed sales tax, where sales tax kicks
in or increases at certain threshholds (not easy, granted). Thus the sales tax
on a vehicle would be x% up to say $20,000, increasing to a higher value beyond
that value. It is like the gaz guzzler tax.
It is notable that 3-4 states get along without sales tax.
E. Esat Atikkan
> In a country the USA, I'm not sure that consumption really is
> proportional to income. When you are poor, almost all of your
> income is
> spent on necessities. Everything is on such a day-by-day hand-to-
> mouth
> level that many things end up costing more (i.e. going to the
> emergency
> room instead of the family doctor). This is because you do not have
> the
> funds for insurance, to plan ahead, to buy or rent a house (paying
> weekly rates at hotels really adds up), or to buy quality & long-
> lasting
> items.
>
> As you move up the scale, possibly the first shift is increased
> expenses
> on diet. It's only at the higher income levels that people actually
> start saving.
>
> It's for this reason that I've always seen sales tax as regressive.
Agreed, we should be taxing consumption of resources which I view as
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