Why do states have sales taxes?
The sales tax gives the poor an incentive to work harder. There are more poor people, so to have them pay their fair share, they have to pay a higher percentage. The sales tax is relatively easy for the state and local governments to collect. If the rich pay most of the income taxes in America, then the poor can pay the sales tax. Which combination, if any should exist even, is correct ? States without sales taxes tend to have the lowest average incomes.
Public Comments
- States want money so have to tax something. Taxing sales in my state exempts things like food and prescriptions so is mostly on things you want to buy. It is better if you are spending most of your income on food, and mortgage payments and saving a high percentage of income. It does make people not want to buy expensive things like vehicles because with a 9% tax paying thousands when buying a new truck or boat hurts. This means some of us save the money instead of paying taxes. Income taxes means to avoid paying more taxes you would need to earn less and progressive tax is even more incentive to not earn more money.
- To collect money to pay for what the government does.
- How do you figure the poor pay more sales tax than the rich. If somebody makes $200K, they lose at least a fourth of that to income tax and the save and invest more, but they still spend $100K of it in most cases. Most states don't make you pay sales tax on necessities like groceries and sometime clothing, so they pay sales tax on a good $90K. If their state has a 7% tax, they have paid $6300 in sales tax. Somebody else makes $20000. They lose virtually none of it to income tax if they have that little income. So they spend most of the $20K, most on necessities, so say they but $10K worth of stuff subject to sales tax. So they pay only $700 in sales tax. So the rich guy paid more in income tax ($50K vs. $0) and more in sales tax ($6300 vs. $700). So success is punished by both kinds of taxes, but sales tax punishes success even more than income tax does.
