Quote:
Originally Posted by GlennD
No sales tax on unprepared food in WA, so that helps a lot.
I always figure that sales tax (especially with that exception) is more progressive than people give it credit for. No need for tax preparers, so the wealthy don't get to just skip out on it. And under-the-table income (whether legal or illegal....) gets taxed when you use it. Seems more fair than income tax IMO.
(hopefully that doesn't dip into the political too much)
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You don't have to pay taxes on unprepared foods, so it doesn't seem as regressive to you. I'm disabled on a fixed income and have to pay 6.5% (5% base + local), which adds up and hurts. Also, sales tax punishes poor people for buying expensive, but necessary, stuff. Think about how much tax you get hit with buying a car, even a used one, and how that tax impacts someone making minimum wage ($7.25 in TN) vs. someone making $40,000 or more a year. It disproportionately impacts poorer people, which is what makes it regressive.
Poorer people don't need tax preparers, because their tax returns are simple. No self-employment income, no itemized deductions, no investment income, etc. While Turbotax/etc. make it hard to do, you can do simple returns like that for free online. (I've been doing my dad's and my own taxes with Turbotax's free version for years.) The IRS will be launching their own free filing system for simple returns soon as well, and they won't try to force you to pay/upgrade. Basically, if your returns are difficult enough to require someone to file your taxes, you probably make enough money to afford it.
Many countries have their tax bureau mail out a filled-out return that people sign and return. If they disagree with it, they can do their own, but they don't have to. It's a shame we don't do that in the US.