General Discussion
In reply to the discussion: Kansas senator says reducing the sales tax on food is a form of social engineering [View all]haele
(15,379 posts)Seriously, do you think that people making half-a-million dollars a year won't have their cook/caterers stock their kitchens and then write it off as a business expense?
I know people in that income range in Texas who do that very thing. Even though they only have a cook come in once and a while for special events, that cook would come in and do their pantry shopping so they could write those groceries off. Since they pay the cook and provide a work area for the cook, they get a full rebate on the tax the cook paid on the food.
Perfectly legal.
And giving big tax cuts to people making over $40K? What big tax breaks do most of those people have under a state income tax?
I make over $40K in an income-tax state (with no food credits) and get nothing but my standard household exemptions and a renter's credit, so I'm still paying the state a lot more than someone living on the margins get. (That renter's credit is not a "tax cut" as I explained above - it's the same as a mortgage deduction for the person who owns the house I rent.) I don't even get an education credit from the state for going to school to get a degree.
I could be making $100K a year (I have co-workers who do so) and also get nothing but my standard household exemptions and the ability to itemize my deductions, unless I made enough to start putting some of that money into retirement investments. (hint, I don't make enough to do more than live paycheck to paycheck)
In states where there is an income tax base for the majority of the revenue, there is no revenue
I'll tell you what I'd do, if I was lived in a sales-tax only state and made between $41K and $60K - I'd be eating out a whole lot more at the big chains - where they don't worry about paying taxes on their groceries, or can write it off as a business deduction, and usually have all sorts of benefits just to be located in that state.
That's what they do in Washington State. That's what they do in Texas. That's what I've seen them do in Florida.
I'd be paying less tax on my food that way - and the state would get less money. Washington State has that problem - and the problem going to a less regressive, more equitable way of collecting revenue is that there are too many $60K + people who want to "have as much of their paycheck as they can" where they can write off all the federal taxes they can and still cheat the state - and f** those who have to pinch pennies weekly just to have enough to eat. After all; those people can get food stamps or go to the food pantry if they don't make enough for food stamps...
While here in California, with only a tax on processed foods, it's cheaper to buy groceries and cook your own food at home. Also healthier and that's better for the state in the long run.
That's why a sales tax on groceries is regressive. People who are living on the margins are forced to pay into the system every time they want to have food at home, while people who aren't have lots of options to cheat the state out of those sales tax revenues.
The vision that supports a sales tax on food/staples is too narrow; heck, having a sales tax/user fee way of collecting revenue is too narrow - you're still giving the few wealthy too much of a tax cut in terms of revenue they provide, and the majority population - the poor and working people are still the ones that are providing the day-to-day higher percentage of their income supporting the state.
I don't care about a "rebate" once a year.
From long experience getting "tax rebates", that amount is not much and unless it's presented as a food-only "credit card", it will not go to help pay for groceries the rest of the next year. Maybe it will go to groceries for the month the rebate is given, but that's about it - and people can't just turn off their lives between paychecks.
Haele