Marketplace, February 25, 2004
You may think your taxes are going down, or at least that's what the WhiteHouse keeps saying. Well, think again. With budgets stretched so thin at alllevels of government - and the federal government failing to back up statesand cities - sales taxes have risen to record highs.
Listen to this. Over the past year, city sales taxes have jumped, onaverage, 13 percent. Besides that, county sales taxes are up 5 percent. Andstate sales taxes, up 4 percent. So, depending on where you live, you mightbe experiencing a triple whammy - a combined city-county-state sales taxhike. Sales taxes have never been higher.
There's no free lunch, folks. If you want at least halfway decent schools,and roads, and safe drinking water, and all the other government servicesyou depend on, then you're going to have to pay - one way or another. So itshouldn't be surprising that, as federal taxes have gone down, city, county,and state sales taxes have skyrocketed.
Now, it turns out that sales taxes are more popular with the public thanincome taxes. The reason they're popular that sales taxes feel morevoluntary. I mean, you don't have to buy that new pair of shoes, right? Yetyou do have to pay income taxes.
But here's the down side. Sales taxes are extremely regressive. Everybodypays the same sales tax, regardless of what they earn. This means that salestaxes inevitably take a much bigger chunk out of the incomes of averageworking people than they do the rich.
Meanwhile, even as sales taxes have soared to record levels, the people whohave benefitted the most from the recent cuts in federal taxes are thoseearning over $200,000 a year.
There's no free lunch - but if you're rich, lunch is getting cheaper all thetime.
