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Adam Smith -- who wrote the original playbook for capitalism -- was in favor of a progressive tax:
I think I should pay more in taxes. Without a doubt. I don't contribute very much to our economy. I don't buy many things. Mostly I invest. If everyone at my income level (and higher) paid more in taxes, we could finally do something about our staggering debt. (And let's lay the debt blame where it belongs -- our insane military adventures. We cannot fix our deficits and our debt just by removing what's left of our social safety net.)
And if we raised minimum wage, it would also help to reduce the total size of our government: The Pitchforks Are Coming
Small point, but neither the deficit nor debt actually matter. They aren't irrelevant, but they don't matter to the extent that we need to worry about repayment.
It's unavoidable. How would we implement a sliding sales tax rate based on customer income?
Well, you could do it on a one year delay--set a certain sales tax and discount it when a purchaser shows a card that indicates their income level was below a certain level. You could also just replace sales tax with more income tax, and allocate the tax to people above a certain income level.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Originally Posted by TheCityTheBridge
Well, you could do it on a one year delay--set a certain sales tax and discount it when a purchaser shows a card that indicates their income level was below a certain level. You could also just replace sales tax with more income tax, and allocate the tax to people above a certain income level.
No, that won't work. They would have to also raise it for everyone else to make up the deficit, and there's no way to know in advance how much those people would buy that year to set the new higher rate for the others.
It's unavoidable. How would we implement a sliding sales tax rate based on customer income?
It's avoidable by not having a sales tax. One way to reduce the regressivity of a sales tax is to exempt used items. I don't think states should get more than one bite at a sales tax apple.
"The most insidious thing about trickle-down economics isn’t believing that if the rich get richer, it’s good for the economy. It’s believing that if the poor get richer, it’s bad for the economy."
That article is one of the better breakdowns of what is wrong with our economy, and what can be done to fix it. I agree wholeheartedly that we should be focusing on a "middle-out" instead of a "top-down" strategy for economic growth. That's where all the numbers are, anyway. The "money that moves" moves through what's left of the middle class. Investment money is far less useful to the economy -- by its very nature, investment is designed to pull money out of the system. Where consumption's only purpose is to put money back in.
Actually, if poor people get richer, it's bad for many people, e.g. if poor people became rich enough to buy homes, landlords would be out of business,
There could rebates at tax time. I get to claim a sales tax deduction when I file my federal income taxes
That's true, you could file an income tax return and receive a refundable credit. It would have to be federal, at least in states with no income tax. Then the states would need to remit the refunded dollars to the federal government. Or maybe the states with no income tax would need to start one, since they just lost a big chunk of their tax base. What a mess.
Also, it does little to ease the burden of the sales tax on the poor, as they will have to front the money and wait for their refund.
No, that won't work. They would have to also raise it for everyone else to make up the deficit, and there's no way to know in advance how much those people would buy that year to set the new higher rate for the others.
Umm, it's not that hard to forecast how much people will spend when you know how much they make. It would not take very long to develop very accurate predictions about the amount of the sales tax break for low-income people.
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