Thank you, Tom. This was thoughtful and enlightening. My only hesitation is about the taxation of wealth gained through disproportionately high wages and investment. You didn’t mention inheritance taxes, and that’s another area where logic and fairness needs to be part of the equation. You’re taking on the thorny issues, and more power to you. Commissioner Goettel gave an excellent overview of Hennepin County services and challenges at a Bloomington LWV forum that is available on the city’s YouTube channel that I would recommend to anyone who wants more information.
Informative and thoughtful piece (as usual). I’m intrigued to learn more about the design / administration of sales taxes that are progressive. How would an abeyance or diminishment of sales taxes get factored in when a low income person purchases goods and services?
There are many ways to make sales taxes progressive, and, in fact, there is a considerable amount of progressivity baked into a broad-based sales tax - the more disposable income one has, the more one purchases (generally). And, unlike income taxes with more breaks at the higher income levels, a sales tax has far less tax avoidance opportunities.
Beyond that, the easiest way to assure progressivity is to simply provide people with an income-based refundable tax credit. Typical spending of people at different income levels is known. If the sales tax rate is 5%, a person at the lowest level of eligible income might receive 5% of the estimated spending every quarter, with the refund phased out as income grows.. It complicates taxes a bit more, but a broad-based sales tax could generate enough revenue to reduce and simplify income taxes. And, allowing counties and cities to incorporate a sales tax into their revenue streams would give them the latitude to reduce the most onerous and regressive tax, property tax
Thank you, Tom. This was thoughtful and enlightening. My only hesitation is about the taxation of wealth gained through disproportionately high wages and investment. You didn’t mention inheritance taxes, and that’s another area where logic and fairness needs to be part of the equation. You’re taking on the thorny issues, and more power to you. Commissioner Goettel gave an excellent overview of Hennepin County services and challenges at a Bloomington LWV forum that is available on the city’s YouTube channel that I would recommend to anyone who wants more information.
Informative and thoughtful piece (as usual). I’m intrigued to learn more about the design / administration of sales taxes that are progressive. How would an abeyance or diminishment of sales taxes get factored in when a low income person purchases goods and services?
There are many ways to make sales taxes progressive, and, in fact, there is a considerable amount of progressivity baked into a broad-based sales tax - the more disposable income one has, the more one purchases (generally). And, unlike income taxes with more breaks at the higher income levels, a sales tax has far less tax avoidance opportunities.
Beyond that, the easiest way to assure progressivity is to simply provide people with an income-based refundable tax credit. Typical spending of people at different income levels is known. If the sales tax rate is 5%, a person at the lowest level of eligible income might receive 5% of the estimated spending every quarter, with the refund phased out as income grows.. It complicates taxes a bit more, but a broad-based sales tax could generate enough revenue to reduce and simplify income taxes. And, allowing counties and cities to incorporate a sales tax into their revenue streams would give them the latitude to reduce the most onerous and regressive tax, property tax
Learned a ton here. Thank you, Tom.