The progressive sales tax / by kevin murray

There are five States of the Union, that do not have a State sales tax, though even some of those States have a local sales tax, of which, the vast majority of the States do have a sales tax, and those States that do have a sales tax, have in almost every case, inexorably risen that sales tax rate over the years.  For instance, in California, when the sales tax was first introduced that rate was just 2.5%, but as of 2019, a combination of the State and local sales tax in some jurisdictions are as high as 10.25%.  The other thing about the sales tax which is especially annoying, is that the price of goods of those subject to the sales tax, do not have the sales tax price embedded into it, so that an item that sells for $10 in California, doesn't actually cost the consumer $10, but rather in a State such as California could cost the consumer $11.03, and those consumers that don't pay much attention to the sales tax or really don't even understand it, must pay that price at the cash register.


Additionally, the sales tax is a regressive tax, because regardless of income, all must pay the exact same rate of that tax, which quite obviously means that those that are poor will pay or have allocated from their income a higher percentage of their money that must be utilized in the paying of that sales tax.  While it is true, that unlike the progressive income tax, which takes into account, the income of the taxpayer, that there isn't any way for the seller of the goods, to know or to apply a sales tax rate based on that income, there isn't any good reason why the structure of the sales tax could not be amended to charge a higher sales tax rate on certain items and a lower sales tax on other items and do so in a progressive manner.  For instance, when it comes to vehicles, the first $20,000 of that vehicle could be charged at the rate of just 75% of the normal sales tax rate, the next $10,000 could be charged at the normal sales tax rate, and any and all amounts above $30,000 could be charged at double the normal sales tax rate.  So too, State legislatures could look more carefully at the items that are subject to sales tax rates, and those items that are considered to be essentials, could have their sales tax removed or reduced, whereas those items that could be considered to be luxuries, could have their rates adjusted to a progressive scale and increased.


The fact that currently sales taxes are setup as one size fits all, is not an innovative way to actually apply sales taxes, especially considering that all States have an implicit obligation to do a better job in accommodating those that are the least and the most vulnerable, while at the same time, charging more for those that can easily afford to pay such.  After all, a sales tax is a consumption tax, so that those that have the wherewithal to purchase goods that are expensive, optional, and/or are considered to be luxuries, should pay a higher progressive sales tax rate for doing so.  


In point of fact, the income tax is progressive, in which, there are tiers constructed at increasing tax rates based on that income, in which, the basic thought is that those that make more should pay more.  At the same time when it comes to spending that money on material goods, those that have more and are willing to spend their money, should pay a higher sales tax rate on a progressive scale.