Column: A refund on your sales tax

The sales tax for the Jail District is expiring but a move to extend it is being considered.

http://www.dcourier.com/news/2018/jan/20/quad-cities-brief-free-tax-preparation-service-ava/

With the new tax to help cover the pension gap for safety workers, sales tax just went up.

http://www.dcourier.com/news/2017/dec/31/monday-prescott-sales-tax-will-grow-275-percent/

Excellent data on state taxes and sales taxes.

https://itep.org/whopays/arizona/

We need a really big refund to wage earners against state and local sales tax.

Every need that comes up anymore, whether state or local, almost instantly becomes a cause for a new sales tax. We use it much too much for things that should be funded otherwise. We have a state sales tax which makes little sense. The combined state and local rate is heading toward the 10 percent range and several increases are proposed.

The situation is a result of conservative policies (gee, thanks conservatives). Sales taxes are horribly regressive. The highest incomes receive much more than they spend and so pay about 1 percent of their income in sales tax, whereas low-wage people pay around 8 percent. (See links with this column online a dCourier.com. Even combining all state and local taxes — income, property, sales, etc. — the bottom pays almost three times the rate that the top does.)

The legislature has worked for many years to lower income and corporate taxes, resulting in our being more dependent on sales taxes. That’s consistent with the tax cut just passed; a few crumbs to the bottom to make a claim of helping them, but huge benefits to the top. Low income tax, and high sales tax, favors the rich.

Sales taxes do have one upside. They result in tourists helping us to pay for things. But with the already high sales tax, and a push reported just the other day to extend the local jail sales tax, and the tax recently added for the pension gap for our safety personnel, and big pushes coming up this year for education sales taxes, and more needed beyond that, we’re reaching a limit. People will stop coming to the state, and the black market will grow in under-the-table sales to avoid taxes.

The status is, sales taxes are high, likely to go higher, and they hurt the lowest incomes much more than the highest ones.

So if we’re going to use sales tax so much, it should work the same way income taxes do, with the top carrying the higher rate, and the lowest wage earners carrying little of it. That could happen by way of a generous refund included in paychecks. It would be scaled down so it’s less the higher the income, to balance the regressiveness of the sales tax.

You might ask where this money would come from? Either other taxes would have to be raised or the state would have to reduce its budget. Well if you don’t think higher earners could afford to pay this, what makes you think low-wage earners can afford to be paying it now?

It comes from one or the other, and right now lower earners are paying a much higher rate of it. You can’t say on the one hand this isn’t affordable, and on the other, therefore the lowest earners should carry the worst of it. If that’s the argument, you’ve got a little logical conflict to sort out there. Good luck with that.

Sales taxes are ridiculously high, can’t keep going higher, and are just a way to soak low-wage and middle earners. It has to be fixed.

Tom Cantlon is a local business owner and writer and can be reached at comments at tomcantlon.com.