General Discussion
In reply to the discussion: Blasphemy: a National Sales Tax would be MUCH better than our present or any Income Tax system [View all]unblock
(52,208 posts)and as noted before, just because the rich are adept at making this complicated and challenging for tax officials isn't an excuse to give up on taxing their income entirely and going after other people.
the rich will benefit mightily from switching to a national sales tax no matter what foods are exempt.
say i make $1,000,000 per year and pay $150,000 in income taxes. that's a 15% effective tax rate, probably lower than most people earning $1,000,000 per year pay.
if i spend "only" $150,000 per year on goods and services (probably more than someone with that kind of income spends), what does the sales tax rate need to be before i pay more under a sales tax regime than an income tax regime?
if the national sales tax rate is a high 20%, that person would need to spend a whopping $750,000 per year to reach the same level as with the income tax.
meanwhile, poor people who are currently exempt from income tax are forced to pay quite a bit. oh, their food and clothing is maybe tax-free, but everything else they spend money on isn't. their zero income tax goes to non-zero, and every penny hurts them.