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Secondly sales/consumption taxes have a greater chance of harming the economy compared to income taxes since they de-incentivize spending money on goods while also possibly having other unwanted side effects such as discouraging tourism.
You could also say that income taxes discourage earning an income!
You could also say that income taxes discourage earning an income!
At the very lower levels, I'd say yes. If you risk losing refundable credits that you receive by not working (at all, or as much) I can see the perceived disincentive. I am grateful I have not been at that level for some time, having to deal with making that decision, but I realize that many people are.
Sales tax taxes my "SAVINGS" not my INCOME, so to speak.
I don't spend money on ANYTHING I cannot afford, or simply, can do without.
Buying something (anything) is done at my discretion - 100% Nobody makes me do it. The only exception is insurance which is sometimes legally required. (there should never be a tax on insurance)
But, I have zero control over how much tax money is taken from my income as "income tax".
Sales tax taxes my "SAVINGS" not my INCOME, so to speak.
I don't spend money on ANYTHING I cannot afford, or simply, can do without.
Buying something (anything) is done at my discretion - 100% Nobody makes me do it. The only exception is insurance which is sometimes legally required. (there should never be a tax on insurance)
But, I have zero control over how much tax money is taken from my income as "income tax".
What about that don't you get?
Sales tax taxes consumption not savings.
You don’t have “zero” control over income tax. You can control the kinds of income you generate and what deductions you may get.
Let’s say my state has tons of outside summer tourism for its thousands of lakes, some of them Great Lakes. These visitors don’t work or earn any income in my state what so ever. How do I tax them? A state sales tax on consumption.
The state is passing a portion of its revenue collection to outsiders.
Let’s say my state is a cross roads state, say THE crossroads state of Indiana. Or maybe Ohio. Millions of people just passing thru. How do I tax them as a state? Income tax? Nope.
Or let’s say I’m an income tax free state with a certain desert city people like to visit. Or another one that’s a swampy state full of retirees who might not have tons of earned w2 income.
Voters in my state...do you want to pay a 12 percent income tax to fund our operations? No? Ok. Do you want to pass tax burden onto people who can’t vote in our state while lowering your overall burden to have our state function? Yes! Heres your 7 percent sales tax.
Wow that was hard to prove that income taxes aren’t “objectively” better for a state to raise revenue.
This logic also works on a national level. If you have a VAT or national sales tax you can tax tourism and much more critically imports, without taxing exports, and without igniting a trade war due to explicit tariffs. An income tax on the flip side taxes the profits made off of exports but leaves imports completely untaxed. European style VAT regimes are much more well optimized for shifting part of the burden of local taxation onto foreign countries than our system is.
Sales tax transfers the focus of tax enforcement apparatus (i.e. the IRS) from the millions who make a paycheck, to the small minority who own and operate retail businesses.
When enforcement is focused on a small minority, the scope for abusive enforcement greatly expands. When only the small minority is affected, the masses tend not to care so much about abuse. If you're not a witch, what do you care about witch trials?
Sales tax taxes my "SAVINGS" not my INCOME, so to speak.
Nope. Sales tax taxes your CONSUMPTION, not your savings.
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