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To: funfan

The problem with the Sales Tax is that it doesn’t apply to services, rents, groceries, etc. Services account for 70% of the economy. Subtract all the stuff that is not subject to Sales Tax and probably only 20% of spending gets taxed. Apply an 8% tax rate to 20% of spending and you are only going to collect 1.6% of all spending in Sales Tax revenue.

All this means that if the Sales Tax applied to all spending, it could be reduced from 8% to 5% and collect three times the revenue, while encouraging residents to buy local rather than online to avoid the higher sales tax. That higher sales tax revenue could be used to reduce income taxes on corporations and individuals.

Instead, CA always takes the approach that hits those with disposable income hardest and coddles to subsistence residents the most. It makes no sense at all.


13 posted on 05/07/2012 8:09:05 PM PDT by Kellis91789 (The ultimate result of shielding men from the effects of folly is to fill the world with fools.)
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To: Kellis91789
If the Munger tax was to get passed along with Obamacare taxes and the possibility all of our Federal tax brackets rising to the old rates before Bush I will have no disposable income oh and I forgot my sewer tax rate going up and my yearly 2% increase in my property taxes and the parcel tax that is on our November ballot. I am tapped out and am not happy about it. What is the point of hard work if all I have left at the end of the day is a bread crumb after I have been forced by the government to use up my income to feed and cloth my darn community.
14 posted on 05/07/2012 9:18:14 PM PDT by funfan
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