Crazy plan X - discuss

[essentialsaltes]

California tax revenues 2009-2010 (see figure 8):

personal taxes $47B
corporate taxes $8B
sales taxes $26B

Pertinent facts:
Sales tax in my hood is a ridiculous 10.25%.
Sales taxes are regressive.
I chortle with glee when I order something on Amazon and pay no sales tax. Even if I had to pay for shipping (which I never do!) it can still be cheaper than paying sales tax. Of course, I always send a big check to Sacramento to cover all my online purchases every year!

Proposal:
Eliminate sales tax and increase income and corporate taxes.

Positive(?) Effects:
more progressive tax
encourages consumption of California goods and services
eliminates online tax loophole
pleasant shock at cash registers everywhere

Negative(?) Effects:
rich people whining
horrifying shock on paychecks everywhere
some people are unable to calculate tips

Comments

[unixronin.livejournal.com]

There is this to be said for a sales tax - it's visible. You are reminded every time you buy something of how much you are being taxed for that purchase.

The Constitution contains a prohibition against double taxation. Well, technically I suppose one could argue we have no double taxation; they don't stop at double. You're taxed when you earn it, when you spend it, when you pass it on to your kids, many of the goods you buy with it are taxed again above and beyond any sales tax. Spend it on a car, and you'll pay sales tax on its value to buy it, sales tax and gasoline tax to fuel it, highway tax to drive it on the roads, tax to put tires on it, tax to dispose of the old tires, and even an excise tax on its value (again) every year merely for continuing to own it. In fact, in California, if you buy it used, and it's been sitting on a lot unregistered, you will pay tax on the time you DIDN'T own it — the State requires you, the buyer, to retroactively register it for the time it was sitting on the lot unregistered while the dealer owned it, which is an utterly shameless rip-off. (I was utterly gobsmacked when I ran into this one in 2005, and vowed never to return to California when I left again. I do my best never to spend another dollar there.)

[ian-tiberius.livejournal.com]

unixronin, would you please direct me to the article and section of the United States Constitution which prohibits double taxation?

(When you discover that the phrase "double taxation" does not appear in the text of the Constitution, you might want to do a little research. This research may lead you to the Commerce Clause, and the realization that the "double taxation" prohibition has to do with multiple states imposing taxes on the same interstate commerce transaction, and nothing to do with all the things you're bemoaning above.)