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Old 01-11-2019, 07:13 PM
 
Location: Aurora Denveralis
4,570 posts, read 1,518,332 times
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Quote:
Originally Posted by SuiteLiving View Post
since sales tax isn't imposed on income, how is it regressive as opposed to being disproportionate?
Because, as said in this thread and by most authorities, it takes a proportionately larger bite of budget for the lower-income, and because of the lessened impact of dollar value to those of higher income. It is proportional to spending, but becomes disproportionate to overall income and budget - which makes it regressive.
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Old 01-11-2019, 07:18 PM
 
898 posts, read 402,818 times
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Quote:
Originally Posted by Quietude View Post
Because, as said in this thread and by most authorities, it takes a proportionately larger bite of budget for the lower-income, and because of the lessened impact of dollar value to those of higher income. It is proportional to spending, but becomes disproportionate to overall income and budget - which makes it regressive.
makes it disproportionate, not regressive.

If a person has $10 million dollars but no income, they pay the same sales tax on purchases as someone who makes minimum wage, even though the sales tax is much higher on the the person with $10 million when compared to their income.
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Old 01-11-2019, 07:52 PM
 
Location: Aurora Denveralis
4,570 posts, read 1,518,332 times
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Quote:
Originally Posted by SuiteLiving View Post
makes it disproportionate, not regressive.
Sales taxes are regarded as the poster child for regressive taxes by nearly all economic authorities. Go ask them.
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Old 01-11-2019, 08:10 PM
 
Location: Cebu, Philippines
2,907 posts, read 1,057,895 times
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Sales taxes are perfectly progressive. A person buying a $50k Mercedes pays 50 times as much tax as a person buying a rusty thousand dollar Subaru beater. A person buying a gold Rolex pays 500 times as much tax as one buying a Walmart Timex. If you want to be a tax protester, don't buy anything at all.

Nothing regressive about having a consumption tax, instead of earning tax. Everyone has it in their power to control exactly how much sales tax they pay, it is a completely voluntary tax.

In the past decade, I doubt if I pad $200 in any year in direct sales taxes, nearly all on utilities, since groceries were not taxed in my state. But I paid no income tax at all on my SS.

Last edited by cebuan; 01-11-2019 at 08:25 PM..
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Old 01-11-2019, 08:31 PM
 
3,517 posts, read 5,225,817 times
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As far as income, you could look at it another way. Some people only get paid what it takes to scrape by. The higher income people benefit by their low wages. Low wage earners are somewhat like slaves. They do have much more freedoms and rights than traditional slaves. But in affect, they are paid just enough to have a small apartment, cheap transportation, food and clothes. At the end of the month they have nothing left over. But the highest income people benefit by only paying them what it takes for them to come into work. They have to support a system that allows that, or they won't have employees.



So you could look at this and tax 2 ways. You could tax the income it takes to cover the very most basic necessities. Or you could tax income, minus what it takes to cover the very most basic necessities.
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Old 01-11-2019, 08:39 PM
Status: "Loving the hilarity of CD." (set 1 day ago)
 
5,412 posts, read 2,506,589 times
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Quote:
Originally Posted by GeoffD View Post
Right, but the impact of a sales tax is regressive since poor people tend to pay proportionally more of their income in sales tax than rich people. Of course, I could go out and buy a Lamborghini where I'm paying sales tax on something that is equivalent of a year's pay.
The impact of a sales tax is disproportionate, and in a negative way, on poor people. But itís not a regressive tax.

Again, a regressive tax is simply the opposite of a progressive tax. Nothing more, nothing less.

Now, one of the things that I find interestingly missing in these discussions, is the fact that every expense, from taxes to gasoline to milk to shoes and everything else that people spend money affects poor people more than rich people. But guess what? It affects every rich person more than it affects someone who is richer. Itís simply the nature of money.

Is anybody really going to reasonably argue that there should be some sort of income adjusted pricing for everything? Of course not, itís a ridiculous notion. But the same people who would never put forth such a silly argument will fall all over themselves to argue in favor of income adjusted pricing when it comes to taxes.

SMH.
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Old Yesterday, 07:04 AM
 
Location: Sonoran Desert, AZ
3,021 posts, read 1,255,393 times
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As I recall from my days of teaching Econ at the University level, sales tax are considered regressive because poorer people pay more as a % of their income than high income folks. The reason for that is high income folks do not spend all of their income, while poor people typically do. The facts are somewhat muddy, since the list of taxable items varies from state to state. But it is generally accepted that sales taxes are in fact regressive.

This has nothing to do with disparate impact. It's just math.
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Old Yesterday, 07:12 AM
Status: "Free Bird - Eagle has landed" (set 14 days ago)
 
Location: Washington State
16,325 posts, read 8,500,631 times
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Quote:
Originally Posted by verybadgnome View Post
I have seen this idea in one article after another, but it still makes no sense to me given the definition of a progressive tax. I would think a true regressive tax would, in the case of income, have higher tax rates for lower income brackets. I guess what is meant is that a flat tax is "regressive" only in reference to the effects of a progressive tax, i.e. it is less good than the preferred scenario of ascending tax rates. Still a property tax at 2% of assessed value is a flat tax, where it to be regressive lower value properties would be taxed at higher rates. My take is once again certain folks are intentionally misinterpreting mathematics as a means of promoting various policies which is funny because I actually support progressive income taxes.
Not regressive but the fact that it's not a progressive tax would make our already large wealth gap even larger....I don't think a flat tax is feasible.
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Old Yesterday, 08:57 AM
 
1,178 posts, read 611,755 times
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Quote:
Originally Posted by cebuan View Post
Sales taxes are perfectly progressive. A person buying a $50k Mercedes pays 50 times as much tax as a person buying a rusty thousand dollar Subaru beater. A person buying a gold Rolex pays 500 times as much tax as one buying a Walmart Timex. If you want to be a tax protester, don't buy anything at all.

Nothing regressive about having a consumption tax, instead of earning tax. Everyone has it in their power to control exactly how much sales tax they pay, it is a completely voluntary tax.

In the past decade, I doubt if I pad $200 in any year in direct sales taxes, nearly all on utilities, since groceries were not taxed in my state. But I paid no income tax at all on my SS.
Cebuan, because there's some relationship between the value of car a person can afford and their income, the example you provide is a flat tax rate on cars that is somewhat a flat tax.

To the extent the relationship between a car's price and what's affordable is often not proportional, it is to that extent more regressive only for persons that cannot readily afford the comparatively necessary car they purchase.
A flat sales tax rate upon cars is certainly NOT a progressive taxes; the tax rate upon the same priced car or the dollar amount of that tax are not proportionally increased dependent upon the purchasers' incomes.
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Old Yesterday, 09:06 AM
 
1,178 posts, read 611,755 times
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Buckeye77, TaxPhd, FelixTheCat, Quitetude,
Quote:
Originally Posted by Supposn View Post
... A tax rate can definitely be described as flat, or progressive, or regressive; but the determination of the tax consequence's character cannot be determined without consideration of the relationship between the tax rate and the subject of the tax.
Refer to this (post #50) for a more complete explanation.
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