01:16 AM
Politico Economics lesson for the day

Swapping sales tax for income tax isn't likely soon - Aug. 11, 2004

Sounds enticing, doesn't it? Do away with our annual stress test called April 15th and just pay extra sales tax, sounds simple, doesn't it?

Think twice. Think thrice and realize exactly how much income you'd lose.

Most middle class people pay about 15% to 30% tax on their net income each year. Change that to a 30% sales tax on what you spend, not your net income and suddenly you're paying at least double what you have been. And if you're spending more than you make (thru loans and charging on credit cards, you get to pay more tax on money you haven't even earned yet!

For the poor, who usually pay no tax (this is people making less than $15-20,000 per year), suddenly they're 1/3 poorer than they were last year. People who make minimum wage right now don't make a living wage - minimum wage on a full time job is just over $10,000 a year, you try living on that - and with a national sales tax suddenly they're making only $7,000 a year??? They might as well go on welfare and unemployment, then they'd be able to eat and pay rent.

And guess who makes out like a bandit on a national sales tax? Yep, that's right, good ole boy Bush's fatcat friends - people making tons of money would pay tax only what they spend - rather than their income. Right now, they're paying around 40% on their net income. Rich people don't spend all their money, they sock it away in investments, it's in partnerships and companies, donations to politicians - so they'd get a tax cut, they might end up paying as low as 10% in taxes.

Gee, I wonder why Bush supports a national sales tax instead of income tax?

(and the idea that companies would magically cut the prices on all their products to make up for this national sales tax? pewwwww! That bullshit sure does stink up the joint. My personal favorite is the idea that we'd all work harder to earn more if we didn't have to pay income tax - as if we're all laying about the house goofing off right now - gimme a break.)

Just some food for thought whenever anyone says that a sales tax is better than an income tax.