Tuesday, July 19, 2011

Brownback wants to change tax structure / LJWorld.com

Brownback wants to change tax structure / LJWorld.com

Well, looks like more of our public services will drain away by the end of this slide to serfdom. Why on earth are we citing Texas as one of our models? They have a massive budget mess. Also, it seems like all changes to the tax structure have to benefit the wealthy.

We have a sales tax of 8.5% in most of Lawrence now. While I understand that it is an important revenue source for both city and state, we have to remember that pushing ever-more of the budget onto sales tax is extremely unfair. It amounts to an additional 8.5% income tax on those who must spend their entire income just to survive. Meanwhile, those who make several times the income of those in poverty may only spend twice as much; a person making $20,000 a year probably has to spend all of it, all except rent, on sales-taxed items. Their tax bill just from sales tax: approximately $1200 (9% of 14,000, which I'd guesstimate as after-rent income). A person making $200,000 might have $50,000 worth of taxable purchases (that is a total approximation), making their tax bill right around $4500. Person B's income is 10x greater than Person A's income, but their share of the taxes is only 3.5 times greater.

The above numbers are totally invented except for the 8.5% sales tax rate, but you get the idea. Reducing the income tax will push the burden of public resources more on those who can least afford it, effectively redistributing wealth upward.

And pushing our schools and public services downward.

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