Abolish the Sales Tax
by Chris Bowers, Mon Aug 02, 2004 at 06:38:13 PM EDT
There has not been a serious national debate over taxes in decades. Within political discourse, it is a consensus that taxes are bad, except maybe on the rich. I have long believed the problem Democrats and liberals have on the tax issue stems from the way Republicans are able to focus the debate almost entirely on income tax when there are many other potential avenues to discuss the issue that would be both popular and friendly to left-wing argument.
- Although it would not be an issue of federal policy, one such promising avenue would be a general left-wing call to abolish the sales tax. As both a flat tax and a tax on everyday consumables, sales taxes are highly regressive. While they are a significant form of revenue for local governments, competing local sales, property and business taxes inevitably work to the detriment of lower income communities. Because they need more revenue, poorer communities tend to impose higher sales taxes, which ultimately work to hurt the people in those communities because of the regressive nature of such taxes. Instead, it would be better if states and the federal government filled the gap created by the abolishment of local sales tax in the form of increased monetary aid.
- Make the federal income tax more progressive. Restore the 39.6% tax bracket of the Clinton years, and maybe even increase it by 2-3%. This could be done while simultaneously making the first 20-30 thousand dollars of income federal tax free, thus maintaining a similar (if not a greater) level of revenue from income taxes while providing tax relief disproportionately to lower income households. According to every recent poll conducted on federal income tax, a plan such as this would be very popular nationwide.
- Make all income, not just the first $90,000 or so, subject to the Social Security tax. This should be pretty popular. Most people are convinced that the wealthy do not pay enough taxes and that Social Security is in danger of bankruptcy. Considering this, to point out that people making more than $90,000 a year do in fact pay a smaller percentage of their income in Social Security than the middle class will surely be a winner. Further, although it would be more difficult to pass and require a large restructuring of the program (which is never popular), it might even be popular to argue that the Social Security tax should become a progressive rather than a flat tax.
- Increase taxes on businesses with more than 15 employees, but simultaneously offer significant tax breaks for companies directly based on how well they treat their workers. Large federal tax breaks can be given to companies who allow their workers to unionize, have a low ratio of executive pay to average worker pay, provide all workers with stock ownership in the company, provide good health care, overtime, vacation and family leave benefits, etc. I have never seen any polling on this subject, but providing incentives that empower workers and encourage owners to treat employees well strikes me as a winning issue.