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Archive for Friday, August 11, 2006

Tax exemption

August 11, 2006

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To he editor:

I would like to support Eva Edmands who, in her fine letter to the editor (Aug. 7), opposes an increase in sales taxes and advocates that food be exempted from state sales taxes altogether.

Sales taxes are highly regressive; in other words, they take a larger percentage out of the income of the poor. How come? Are sales taxes not the same percentage on every purchase? Indeed they are, but the poor spend a major part of their income on basic necessities, while high-income earners save a part of their income, buy stocks and bonds, purchase expensive homes, take cruises or vacation trips to foreign countries - all of these free of federal or state sales taxes.

Exempting food purchases in markets (not necessarily in restaurants) would make such taxes somewhat less burdensome for the poor. The argument that such an exemption would be too complicated makes no sense; many other states, such as California, have been doing it successfully for quite a while. Kansas exempts not only the items listed in the paragraph above but also prescription medicines - and I have never heard this causing any problems.

If an increase in state taxes is deemed necessary, would it not be fairer to increase income taxes, which take a smaller percentage out of the income of those whose needs are greater and whose financial situation is more precarious? Cities in Kansas, however, can't to do that. They can raise only sales or property taxes, and if they decide to do the latter, the exemption of food is definitely called for.

Harry G. Shaffer,

Lawrence

Comments

Jamesaust 8 years, 4 months ago

A useful letter but with two problems:

  1. "all of these free of federal or state sales taxes" - true as far as it goes but silent on the fact that all named items are subject to differing forms of taxation - some quite onerous.

  2. "would it not be fairer to increase income taxes..." Fairer, perhaps. But not as useful to Kansas. Income tax revenues vary greatly depending on economic activity. For a state like Kansas that must balance its budget, unfortunately, slow economic times create simultaneous declines in income tax revenue with increased spending needs. That explains why Kansas (like most states) rely on several different types of taxation schemes with differing, and partly complementary, revenue characteristics.

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