yourworstnightmare asks:

"Why should sales be taxed? Why should property ownership be taxed?"

I can't answer the latter, but I'll offer my take on the former:

Under the current system, we are not all paying income taxes. Hell, a lot of us don't even have "incomes"--not officially, at least. Do drug dealers report their incomes to the IRS? Do they pay into Social Security? What about illegal immigrants, and those dishonest business owners that employ illegal immigrants?

You can cheat on your tax forms all you want, but outside of downright shoplifting... it's pretty hard to beat the sales tax at the cash register. Drug dealers, illegal immigrants, and others that live "off the grid" may skirt the income taxes, but like the rest of us, those folks have to buy bread and milk... gas to put in the vehicle... a new VEHICLE to replace the old one... clothing... music CDs... vacuum cleaners, laundry detergent, the list goes on.

Our retailers and their employees already serve as "tax collectors" for their city, county, and state. Why not tack on another penny or two per dollar, and send it to the federal government? Could it possibly be enough to greatly reduce, or even eliminate altogether, the federal income tax?

Seems worth a try, to me.

I would advocate "sales tax refunds" for those folks whose earnings are at or below a certain amount. The only requirement would be to send in:

1) proof of citizenship

2) proof of residency

3) proof of employment and/or income

Just fill out the forms, and you get a refund check... simple!

Agnostick agnostick@excite.com

yourworstnightmare -

There is actually a stronger, more pragmatic reason why we have a progressive income tax (lately not progressive enough) that goes beyond questions of morals or ethics, and it is not very well understood and rarely well-explained:

We have a progressive income tax system because it is the only practical way to balance the regressive nature of all the rest of the taxes we pay, from property to sales to gasoline to sin taxes, etc. The "fairest" way to do taxes across the board would be a flat rate on ALL taxes (not just income tax), but clearly it would be ridiculous to have to calculate a percentage of our income (or more realistically our net worth) every time we transact any purchase, be it at a postage machine, a night-club, a convenience store, pay-at-pump, and so forth. So, since regressive taxation affects those at the bottom the most and those at the top the least, we have a progressive income tax to even it out, where it is not so impractical to take income and worth into account.

This is why whenever you hear politicians floating the "flat tax" proposal, warning bells should go off, because what they really intend is to remove the progressive nature of the income tax, which would tilt things even further than they already are in favor of those at the top. In other words, sure, it's a flat income tax, but since income tax is only one part of an overall regressive tax whole, making it flat rather than progressive produces an overall regressive tax picture.

Another common ploy is to argue for a "flat" income tax on the grounds that the current tax system is just "too complicated". While it is certainly true that the system is too complicated, what they conflate and most people fall for is that the complications arise from the complex set of loopholes and tax breaks that mostly benefit those at the top, and NOT from the progressive nature of the income tax. It literally only takes about 30 seconds to look up your income in a chart and find your allowance and where you sit in the tax bracket, but the rest of the hours-long headache comes not from the progressive nature of the chart but from filling out endless pages of expense categories and income sources and so forth. Progressity has absolutely nothing to do with complexity when it comes to income tax.

JA said: "I'll just note that any study relying upon "average" income is suspect, seeing that on the down side, income cannot be less than $0 but on the up side, the sky is the limit. It doesn't take more than a handful of one-time, sky-high incomes in a year to pull the "average" far above the "mean." "

JA, this is why the median is always much more illuminating than the mean in these situations. Means are intentionally used to skew results.

The property tax figures are skewed by the "McMansion", as JA puts it. One might look at it a different way and say that low income people have a chance for home ownership in Kansas and so pay a larger proportion of their income on property tax.

Having said that, the mostly GOP-led "war on income tax" in the last 25 years has resulted in greater reliance on the inherently regressive property and sales taxes.

A progressive income tax is the most fair and consistent tax and actually taxes something meaningful. Income should be taxed because it represents a level of benefit that an individual has gained from societal infrastructure. Why should sales be taxed? Why should property ownership be taxed?

Jesus would have favored a progressive income tax. Just read the bible and it is obvious ; )

With regard to sales tax exemptions (how widely the tax is applied), I have little doubt that over time more and more items are exempted from it.

It does not follow, however, that sales tax exemption is itself problematic. The two criteria for exemption are: does the subject transaction lead to greater economic activity over time, and would the subject transaction not occur without the tax exemption?

If the activity is merely the sum of its parts then it should not be exempt. In short, is the item not taxed a productive asset or consumption? If it is a new "plastic press" for the plastics company then it is a productive asset; if it is a new Mercedes for the plant manager to drive to work in style then it is consumption.

Likewise, if it is a productive asset, would the activity occur regardless of the tax, or at materially lower levels? In other words, you tax transactions that MUST occur not those that might or might not occur (taxing the later increases the liklihood that they do not occur and so produce zero tax revenue - or secondary economic activity).

Finally, regarding the income component, beyond obvious things, I'll just note that any study relying upon "average" income is suspect, seeing that on the down side, income cannot be less than $0 but on the up side, the sky is the limit. It doesn't take more than a handful of one-time, sky-high incomes in a year to pull the "average" far above the "mean." Good tax policy is not based upon the odd, off-the-scale person (say a Kansas equivalent of Warren Buffett) but around the mass of tax payers.

Its hardly a surprise that these "studies" arrive at their conclusions. They've been predetermined by their structure.

For example, "The tax incidence study ... shows that low-income Kansans pay a higher percentage of their income for taxes than middle- and upper-income residents."

Or rewritten more accurately, the study of combined, gross tax paid by Kansans receiving little cash or cash equivalents within a calendar year is a higher percentage than those with material cash or cash equivalents within a calendar year.

No doubt. But then that mixes apples with oranges (with apples = cash but oranges = wealth).

Since the study seems to aim at criticizing property taxes it would need to show that those with little property wealth pay a higher quantity (or percentage) of wealth as property tax than those with middle or high levels of property wealth. Of course, they do not, and stating so would then defeat the purpose of the study.

"The lowest income group in Kansas paid 23.6 percent of its income in property taxes, while the highest-income households paid 0.6 percent of their income in property taxes." Might this be because, despite the coming of the McMansion, that the connection between income and property is elastic? That increasing salaries and increasing home values do not increase in a 1:1 ratio? (Just how many bathrooms does a household of 3 people need regardless of how great their in flow of annual cash?)

Likewise, those will little income (from the German, to come in) of cash or cash equivalents pay little in income tax (percentage or gross) than those with middle or high levels of incoming cash.

(My guess is that the low-income group paid about 0.6% of their income in income taxes while the high -income group paid about 23.6% of their income as income taxes. Fair or unfair?)

Where to begin?

As this article comes up short of stating, there are three types of tax revenues (but more tax programs) available to the state: property, sales, and income.

The basic upshot of the article is that income tax is too low at the expense of property and that income tax is too low at the expense of sales. (No clear preference for property vis-a-vis sales.)

Above all is an unstated measuring stick of the percentage - and not the gross quantity of revenue produced - as the "fair" measure. Further, that population should be segmented by income (low, middle, high) not by property wealth or spending (again, low, middle, high).

http://www.fairtax.org

Agnostick agnostick@excite.com

That's so easy to say, ksknowall...you start: what do you want to cut first?

Nice to see that some low income people in Kansas can afford property. They sure can't in most states. I say the truly poor don't own property...they couldn't have come up with the down payment. And they'd sell it to pay for other costs if they had it. So, therefore, the property tax is irrelevant to them. And, if they claim the Earned Income Tax credit, the sales tax is the main tax they pay.

If you're serious about helping the poor, waive the sales tax on food and medicine. Increase public transit options so folks don't have to own cars.

But we all know they're not serious about helping the poor. The poor don't vote, after all.

Heres an idea that is the obvious way to fix the overtaxed problem

MAKE ALL THE GOVERNMENT'S SMALLER!

Reduce local, county, state and federal government levels and taxes automatically will need to be less for all of us.