Many people I talk to on the subject of taxes erroneously believe that the income tax is a fairer tax than a sales tax. The argument goes that the income tax can be ”graduated”, ( i.e. higher incomes are taxed at a higher percentage than lower incomes), while the sales tax makes no distinction as to income level. To my way of thinking a sales tax which doesn’t discriminate, percentagewise, must be fairer. Of course, though, even with equal percentage paid, those who buy more will pay more taxes.
My most compelling argument in favor of the sales tax is that it is a tax on consumption while the income tax is a tax on production. When production is retarded less goods end up for sale in the market-place. Conversely when consumption is retarded more goods end up for sale in the market-place. Basic economics dictates that with demand being stable more supply will drive prices lower.
Although I have much more to say on this subject, I’m going to leave it here for now. If you have any thoughts on this subject, I’m anxiously awaiting your input.
Big Daddy Don
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