I was in a convenience store today and someone was buying some tobacco. I asked the clerk when the tax increase was coming and she said Monday. She knew well because she was a smoker.
I was surprised to learn that there hadn’t been a run on tobacco yet, she was too and as a smoker herself was concerned about the extra $2 a pack. She also thought it was unfair to the lower classes as most wealthy people she knew didn’t smoke so wouldn’t be paying it. But she also said that when clothing taxes go up the wealthy will pay more as they buy more expensive clothing. That seemed to please her that the wealthy would be paying more eventually.
I didn’t get into any more conversation as I had to get somewhere, but later I thought about the conversation quite a bit. First, it occurred to me that the main issue to this lady was that someone should pay more than she does and that it should be the wealthy. Second, it seemed to satisfy her that when the clothing tax comes in that will make it equal again.
But!! The concept of % rates never came up! Just the $2 per pack and the extra dollars on clothes for the wealthy. Never mind that the rate was the same, the dollars they were going to pay were more and that was good.
It always amazes me how folks can go back and forth on %’s and real dollars, usually choosing which one best fits their cause. I didn’t bother to tell her that income tax would work the same way; that if we all paid the same rate that the high earners would pay more dollars. Not enough time to explain that.
But if people really are just concerned with total dollars for taxes, it makes a good case for a national sales tax to replace income tax. The wealthy would pay more (that makes people happy) as they buy more. The folks living under the radar on a cash basis would also be forced to pay when they buy stuff. Folks like high end drug dealers etc. would all pay sales tax. IRS could be vastly downsized or eliminated and life would be simpler.
Maybe more people would be happier too.