5 Reasons to Dump the Sales Tax
My latest column is up at Disclosure News, check it out.
Whether it is to fund road repair and construction, local jails, or supplement public school funding, politicians in Illinois seem to be enamored with sales taxes. A penny here and a penny there taken from the pockets of consumers, they argue, cannot be that harmful. Yet there are compelling arguments that sales taxes have a depressive effect on the economy, disproportionately affect the poor, and are not a reliable source of revenue. Far too often, politicians use deceptive tactics to get sales tax increases approved. Before voting on any sales tax increase, voters deserve to consider the following reasons why sales taxes should be rejected.
1. Sales taxes punish consumer spending and hurt the local economy. It is generally understood that taxes influence behavior, and that we get less of a behavior when it is taxed. That is why activists demand high taxes on cigarette and alcohol sales. Their goal is to make those products more expensive so that less people will be inclined to purchase them. Why then do we tax consumer spending in general? For every increase in the sales tax, that is less money in a person’s pocket to spend at stores, gas stations, and restaurants. In turn, those businesses have less revenue with which to hire more employees or expand.
Posted on June 6, 2012, in Columns and tagged Government Spending, Illinois Sales Tax, Penny Tax, Public Safety Tax, regressive tax, Road Tax, Sales Taxes, sunset clause, Tax and Spend, Tax on Commerce, Why Sales Taxes are Bad. Bookmark the permalink. Leave a comment.