Quote:
Originally Posted by redpoint5
As always, I'm attempting to discuss the "why" of the topic rather than just the "how", and it seemed you had already covered the "how" of the thread.
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Sales tax- every cashier in the country is a tax collector all year long, and you need to either deal with deductions at the grocery store every week until you max them out or just do it once a year when you file. Every store also needs to account for all these individual collections and forward them to Washington.
Income tax- Every company has someone who handles payroll already. This person handles deductions relatively seamlessly, and you can work on deductions once a year when you file.
Hopefully, most of us will have fewer jobs in the course of a year than we will have interactions with cashiers. That alone makes taxing income more efficient. Aside from the efficiency benefits of collecting tax payments in bulk once a week/month/what have you instead of every time someone in the country buys gum, income taxes have the advantage on not having to be so regressive.
The
why is easy: government's got to get paid for some way.
The
how is easy, too. Except everyone's got one deduction they like, and tax deductions are used to encourage or discourage certain things, so deductions aren't going away.
Pointing to current political discourse is simply a way of distracting from what you don't want to say out loud: people who are able to save a high portion of their income will see their tax rate reduced by a shift to sales tax at the expense of people who are not able to save a high portion of their income.
Warren Buffett points out that he pays a lower effective tax rate than his secretary, and also points out that that's a bad thing. Switching from income to sales tax would probably result in him paying an actual lower dollar amount in taxes than his secretary. That's even worse.