General Discussion
In reply to the discussion: Kansas senator says reducing the sales tax on food is a form of social engineering [View all]hfojvt
(37,573 posts)sales tax rate is 6.3%, rebates are $84, and $41.
Consider three single people incomes
$11,000 (me)
$28,000
$45,000
assume they all spend $300 a month on food (it's even less regressive if they spend say 25% of their income on food).
total sales taxes on food = $226.8
but because of the rebates, their net tax bill is
$11,000 = $142.8 (1.3% of income)
$28,000 = $185.8 (0.66% of income)
$45,000 = $226.8 (0.5% of income)
Okay, not exactly progressive, but get rid of it and how are the benefits distributed? It's a bigger benefit to the higher income family. Total tax cut is $555.4 with 41% of it going to the richest person in the example. Whereas a mere $90 added to the food sales tax rebate would make it progressive. A $46 tax cut to the middle person and a $90 tax cut to the lower income person.
Increasing and expanding the rebate would give tax breaks to poorer people. Getting rid of the sales tax on food and the sales tax rebate will give most of its breaks to those with higher incomes.