Posts tagged with: Sales tax

Sales-taxImagine you’re at the checkout line at the supermarket and the clerk asks how much income your family earns each year. Offended, you ask why that is any of her business.

“We need to know to determine how much sales tax you need to pay,” the checker politely explains. “If you’re classified as the ‘working poor’ you need to pay more sales tax.”

“I think you have that backwards,” you helpfully add. “You mean the working poor need to pay less sales tax, right?”

“Oh, no sir,” she say, still blissfully cheerful. “It’s a new anti-poverty program initiated by the federal government that helps the poor by making them pay an addition sales tax on their groceries.”

Although it isn’t stated so clearly or applied so directly, the federal government has in fact implemented an “anti-poverty” initiative that does just that. As economist Thomas Macurdy says, “Most Americans wouldn’t cheer this program, nor would most political leaders champion it. Yet that is what happens when Congress raises the minimum wage.”

Earlier this year Macurdy published a study in the Journal of Political Economy that examined the effect of the minimum wage on the poor. As he explains in the Wall Street Journal, his findings show that the minimum wage serves as a tax on the poor:

It’s called the “Marketplace Fairness Act,” but how fair is it and who does it really benefit? The legislation, which is expected to pass the Senate, is heralded by supporters as instituting market equity to the brick and mortar retailers. Supporters also proclaim it will help to alleviate state budget shortfalls. The Marketplace Fairness Act gives new authority to states to directly collect sales taxes from online retailers. Jia Lynn Lang at The Washington Post explains:

ammoNeed to justify a new sin tax or raise an existing one? Adam J. Hoffer,William F. Shughart II, and Michael D. Thomas recently explained in U.S. News and World Report how it’s done:

Claim that consuming some good or engaging in some activity contributes to ill health or harms the environment. Argue that “experts” know what choices consumers should make better than the consumers themselves know. Finally, don’t forget to select items for taxation that only a minority of the population buys, but that you and the majority of voters do not. Be a paternalist.

That seems to be the steps lawmakers are taking in recent proposals to add firearms and ammunition to the list of  items worthy of a “sin tax.”