Wednesday, November 16, 2011

Opposition to sales taxes as regressive from 136 years ago

Via the Gotha program of the German Social Democratic Party....the more things change, the more they stay the same, sometimes.

Gotha Program in English

"(8)[In addition to the demand for universal suffrage for all above twenty years of age, secret ballot, freedom of the press, free and compulsory education, etc.,] the socialist labor party of Germany demands the following reforms in the present social organization:[...] (2) a single progressive income tax, both state and local, instead of all the existing taxes, especially the indirect ones, which weigh heavily upon the people;[...]"

A sales tax is an indirect tax, because it's not paid directly on your income and has regressive components in that it takes more of a share of the income of poorer folks than it does of folks with money. It does this because while everyone has to eat, not everyone has to buy fancy stuff, meaning that as a tax it will absolutely effect people on the low end of the spectrum and only potentially impact people with higher incomes. When they're done buying the essentials they can save their money, or pick and choose in their purchases and what they pay sales tax on. The more money you make the less the sales tax you pay on essentials matters in your budget, and the less you make the more impact it has on your over all income.

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