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Changing sales tax exemptions for food

phattonez

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Currently uncooked food is exempt from sales taxes. This is because taxes on necessities at a flat rate is regressive to the poor because they pay a higher proportion of their income to necessities. However, this falls short for a number of reasons:

1. Other necessities like clothing and housing are not tax exempt.
2. Unnecessary expenditures like more exorbitant foods are also tax exempt.

Instead, we ought to tax those goods, but offset with a set amount to each person per month. This way there is effectively zero tax on necessities without giving a tax break on luxuries. It's a relatively minor change, yes, but this is a significant flaw in our tax system.
 
Another added benefit: only citizens and authorized residents would get this check.
 
Currently uncooked food is exempt from sales taxes. This is because taxes on necessities at a flat rate is regressive to the poor because they pay a higher proportion of their income to necessities. However, this falls short for a number of reasons:

1. Other necessities like clothing and housing are not tax exempt.
2. Unnecessary expenditures like more exorbitant foods are also tax exempt.

Instead, we ought to tax those goods, but offset with a set amount to each person per month. This way there is effectively zero tax on necessities without giving a tax break on luxuries. It's a relatively minor change, yes, but this is a significant flaw in our tax system.

Are you proposing a UBI or some sort of credit for sales tax?
 
Are you proposing a UBI or some sort of credit for sales tax?
Kind of, but the amount would be so small that no one would call it an income.
 
Currently uncooked food is exempt from sales taxes. This is because taxes on necessities at a flat rate is regressive to the poor because they pay a higher proportion of their income to necessities. However, this falls short for a number of reasons:

1. Other necessities like clothing and housing are not tax exempt.
2. Unnecessary expenditures like more exorbitant foods are also tax exempt.

Instead, we ought to tax those goods, but offset with a set amount to each person per month. This way there is effectively zero tax on necessities without giving a tax break on luxuries. It's a relatively minor change, yes, but this is a significant flaw in our tax system.

Wasn't that a part of the FairTax scheme, to prebate what taxes on expenditures up the federal poverty line would be?
 
Kind of, but the amount would be so small that no one would call it an income.

I guess that depends, if you say "a household spends 10K a year on food" and so you then say "the taxes on 10K of spending are say 1K" so therefore everyone gets 1K in tax refunds every year. that would not be a tax credit or UBI, it would be a "prebate" I think.
 
Wasn't that a part of the FairTax scheme, to prebate what taxes on expenditures up the federal poverty line would be?
If it was then it's eminently reasonable.
 
Instead, we ought to tax those goods, but offset with a set amount to each person per month.

I can see myself supporting this proposal. It would eliminate debate over what food/clothing/housing should be exempt.
 
I can see myself supporting this proposal. It would eliminate debate over what food/clothing/housing should be exempt.
Is there any exempt clothing?
 
Is there any exempt clothing?

Not that I am aware of but I haven't researched it tbh.

Would citizens in, let's say Minnesota, get a slightly larger dividend than Florida residents since they would have to pay more for cold weather clothing?
 
Not that I am aware of but I haven't researched it tbh.

Would citizens in, let's say Minnesota, get a slightly larger dividend than Florida residents since they would have to pay more for cold weather clothing?
Sounds reasonable to me.

Also this should be applied to the mortgage tax deduction, this way we're not subsidizing high value areas or landlords.
 
Sorry, I’m on my smaller device and can’t necessarily link up sources.

Here in Virginia, food is NOT exempt from sales tax, although “uncooked” items are taxed at a lower rate (2.5% food vs whatever the state + local add-on rate is for other things). There is no rebate and, if you purchase online and that retailer doesn’t collect the sales tax, you are obligated to declare it and PAY it with your state income tax return. (That’s a whole other issue that’s mostly gone away because most online businesses have become “aware”)

Before you go espousing your proposal, please understand each state may do it differently.

Personally, I’d prefer one “sales” tax rate to cover EVERYTHING. Same rate. You buy, you pay. And, yes, I understand “necessities” are, well, necessities but sales tax is a large portion of state and local revenue. It stays in our community and funds many of our needs.
 
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And, I’ll add this anecdote.

We’ve taken our kids to the $1 Store and they’ve walked in with a 1-Dollar bill. When they go to check out/pay....and the total is, well, something more than their dollar bill...we all look at each other and say....”Gotta pay the Taxman.” (Sorry for the gender reference)

They now carry coins (nickels and dimes) to add to their dollar bills.

I hope we’ve taught them that those nickels and dimes add up and pay for many of the nice things we have in our community.

Not just with that purchase but with EVERY purchase.
 
Sorry, I’m on my smaller device and can’t necessarily link up sources.

Here in Virginia, food is NOT exempt from sales tax, although “uncooked” items are taxed at a lower rate (2.5% food vs whatever the state + local add-on rate is for other things). There is no rebate and, if you purchase online and that retailer doesn’t collect the sales tax, you are obligated to declare it and PAY it with your state income tax return. (That’s a whole other issue that’s mostly gone away because most online businesses have become “aware”)

Before you go espousing your proposal, please understand each state may do it differently.

Personally, I’d prefer one “sales” tax rate to cover EVERYTHING. Same rate. You buy, you pay. And, yes, I understand “necessities” are, well, necessities but sales tax is a large portion of state and local revenue. It stays in our community and funds many of our needs.
A flat sales tax without exemptions or rebate would be regressive because the poor spend more of their income, especially on necessities. I don't think anyone is in favor of a regressive tax.
 
A flat sales tax without exemptions or rebate would be regressive because the poor spend more of their income, especially on necessities. I don't think anyone is in favor of a regressive tax.
A "flat tax rate" is the epitome of "equal" and that's where I tend to fall in most things. Whether it's "fair" or "right" is another whole story and I think, maybe, what you're trying to get at in this thread.

Once you start to stray from tax-it-all, the arguments become what don't you tax. You should have been around when our state instituted the lower tax on food and then again when our locality voted for a "meals tax" (on top of a sales tax!). It almost became a "what is..is" with "food." Is ketchup food or a condiment? Is a loaf of bread "prepared" and should be taxed as such (when you could buy the ingredients at a lower or no-tax scheme and make it yourself)? That's the kind of silly stuff that turned friends into foes.
 
I can see myself supporting this proposal. It would eliminate debate over what food/clothing/housing should be exempt.

I am not an overall supporter of this idea, but I will say its far better to just set an amount than to try and track purchases. That would be too complex and invasive.

However, at least for food, this would only work if food stopped being subsidized on the company end. Right now the reason a lot of crap food is cheaper than real food is because of those subsidies. It would be far better for the country to encourage cooking with real food at home and that starts with cost
 
I am not an overall supporter of this idea, but I will say its far better to just set an amount than to try and track purchases. That would be too complex and invasive.

However, at least for food, this would only work if food stopped being subsidized on the company end. Right now the reason a lot of crap food is cheaper than real food is because of those subsidies. It would be far better for the country to encourage cooking with real food at home and that starts with cost
This is a very popular idea that goes nowhere because those big ag companies buy out politicians.
 
A "flat tax rate" is the epitome of "equal" and that's where I tend to fall in most things. Whether it's "fair" or "right" is another whole story and I think, maybe, what you're trying to get at in this thread.

Once you start to stray from tax-it-all, the arguments become what don't you tax. You should have been around when our state instituted the lower tax on food and then again when our locality voted for a "meals tax" (on top of a sales tax!). It almost became a "what is..is" with "food." Is ketchup food or a condiment? Is a loaf of bread "prepared" and should be taxed as such (when you could buy the ingredients at a lower or no-tax scheme and make it yourself)? That's the kind of silly stuff that turned friends into foes.
It's not equal. A family who makes $30k and spends all of it on their necessities gets the full tax rate. A family who makes $1 million and spends only one tenth of it gets 10% of that tax rate.
 
Wasn't that a part of the FairTax scheme, to prebate what taxes on expenditures up the federal poverty line would be?

yes. The fair tax only taxed people on money spent over the poverty rate.
So you paid no sales tax on items up to the poverty rate for your family.

you also only paid sales tax on NEW items not used items.
so if you went to buy a used car you would not pay sales tax
if you went to buy a previously built home then you would not pay sales tax.

you would receive a prebate every month based on family size according to the poverty rate.
so a family of 4 would receive a prebate of about 6,767 dollars.

it also eliminated the income pay roll tax. so if you made 1000 dollars a week you would get all 1000 dollars a week.
 
Not that I am aware of but I haven't researched it tbh.

Would citizens in, let's say Minnesota, get a slightly larger dividend than Florida residents since they would have to pay more for cold weather clothing?

clothing is clothing.
 
It's not equal. A family who makes $30k and spends all of it on their necessities gets the full tax rate. A family who makes $1 million and spends only one tenth of it gets 10% of that tax rate.

yes because the more you spend the more tax you pay. that is just common logic.
 
This meaningless post does not address at all my question.

actually it does and it isn't meaningless.

clothing is clothing no matter if you are in FL or alaska or hawaii.
you are trying to piecemeal something that isn't.

so it addresses everything.
 
yes because the more you spend the more tax you pay. that is just common logic.
So the poor should be punished because they have to spend a higher percentage of their income to survive?
 
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