March 13, 2013

Not another head tax - the most regressive tax of all

According to a Pioneer Press article:

More at: http://www.twincities.com/politics/ci_22768070/insurance-surcharges-boost-pension-plans-gets-second-look?source=rss

======================================================================

Taxing each household the same amount (similar to a head tax) is far more regressive than even a sales tax. Yes, I know, it's households, not people, but it's close. And yes, I know only homeowners pay the homeowner insurance surcharge, but virtually all economists believe that in the long run in a market economy, homeowner costs and taxes are paid mostly by the renters in the case of rental property. And yes, the poorest of the poor probably don’t have a vehicle. But it is still a VERY regressive tax.

In Golden Valley, we’ve been recently hit with new $24 / year surcharges on our electric bill and another $24/year on our gas bill – another similar head / household tax. (I know that's not the legislature's doing, but its an illustration of how our elected officials are adding and increasing the most regressive taxes).

And then don’t get me started on the sales tax increases – the next most regressive tax after head / household taxes. The sales tax on services, besides being extremely regressive, is mostly a tax on local labor.

In an age when inequality is soaring through the roof, I am shocked and horrified that a Democratic governor and legislature seems to be doing all it possibly can to make the situation worse.