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That's the problem, too -- it applies equally to necessities and luxuries. Sales taxes are regressive because there is a certain amount of non-discretionary sp
by jsankey 11y ago
That's the problem, too -- it applies equally to necessities and luxuries. Sales taxes are regressive because there is a certain amount of non-discretionary spending everyone has to make, regardless of income, just to live.
- orangecat 11y agoMost sales tax proposals include a "universal rebate", which is a fixed monthly amount given to everyone that's intended to cover the tax on necessities.
- jsankey 11y agoCertainly there are ways to mitigate the effect, I was just pointing out that the universality of a sales tax isn't all positive.
- paulddraper 11y agoWe tried a luxury tax in the 90s. Yachts were more expensive and due to highly elastic demand, the industry plummeted. Companies went under or laid off thousands. But don't worry. Guess who works at yacht manufacturing plants? Not rich people. They weren't hurt, and they were fine with taking their money elsewhere.
- jsankey 11y agoNice straw man. I didn't even mention luxury tax, let alone promote it.
- deleted 11y ago[deleted]
- paulddraper 11y agoYou implied that it would be better if luxury items were taxed at a different (higher) rate than other items. They is a luxury tax. However, if I misunderstood and you advocate having the same tax rate on luxury goods as other goods, then we are in agreement on this point.
- thesteamboat 11y agoIt doesn't necessarily need to. We could have a `digit-sales tax', i.e. count the number of digits in the item cost and add a tax at that percent. Something less than $10 only has a 1% tax, while something costing $10,000 has a 5% tax. Clearly the numbers should be adjusted if someone wants to turn this into a serious tax proposal, but it seems possible to design a progressive sales tax.
- jsankey 11y agoIt's not quite so simple. Many non-essential things are cheap (e.g. iOS games), and many essential things are expensive (e.g. housing, transport). The line between essential and luxury is also subjective. So you have to start categorising, and things get messy.
- paulddraper 11y agoCostco would be a bad place to shop.