If we can survive the unnatural disaster that is the second Trump administration, Democrats must prioritize long-term institutional rebuilding over quick fixes.
I’m a new subscriber and so far so good. We seem to be on the same page on most issues. In this article and the previous one, you mentioned the need for a progressive national sales tax. As sales taxes are always described as regressive, I am intrigued by the concept of a progressive sales tax. I’m still binge reading your past posts so perhaps you explained this in an earlier article.
Hi Carl. Thanks for reading and subscribing. You are 100% correct that sales taxes on their own are regressive because the burden falls disproportionately on the poor who have to devote much more of their income to consumption than the rich. I put the word “progressive” in front of sales tax to suggest that variable rates (rather than a fixed flat rate) would be used ensure revenue is not raised by taxing the most vulnerable on items that they need to survive. One way to do that is tax basic necessities (e.g. food, medicine, clothing) at a low or zero rates negative rate (essentially a subsidy). Luxury items or products that cause harm to public health or the environment would be taxed at significantly higher rates. More so than just raising revenue, the tax works to incentivize socially optimal behavior and internalize costs inflicted on society. Also I would include financial products as part of the sales tax since the rich funnel much of their wealth toward investment rather than consumption. Finally this sales tax would need to be paired with a wealth tax to prevent concentration of power and ownership at the top. I have not gone into depth on Substack about these tax ideas but I have been working independently to create a 20 Page Tax Code to replace the current 2,000 page behemoth with over 10,000 pages of supplementary regulations. I want those on the progressive side of the political spectrum to image ways we could restructure our tax system to increase trust in government and reverse wealth inequality in the process.
What a powerful metaphor! Even more powerful, perhaps, than the storm itself.
But for real, sorry that your area had to deal with this, and I can't imagine why burying the lines is so hard...it'd probably save the company money in the long run!
You know I can’t resist a good tortured metaphor :)Thankfully most of the power has been restored to folks in my community so life is somewhat back to normal…whether the long term problems will be fixed is a whole other issue.
Thank you. Most states and localities do this to a degree already so it should be easy to advocate. There are taxes for liquor and gas for example. I can see, though, where this might get complicated. When does a car become a luxury car? When does a refrigerator become a luxury refrigerator? It would, however, be better than the status quo.
The devil is definitely in the details, especially in drawing the line between luxury and necessity. I know $55,000 MSRP is the cut off for getting the EV tax credit on vehicles. Also too many variations and exceptions can defeat the purpose of having a straightforward tax that everyone can understand. I would set the base tax rate at 10% and allow for a total of 200 adjustments that Congress can renew or tweak every year. That way you wouldn’t have a bunch of ad hoc transactional accommodations made for specific companies like what is currently being done with the tariffs.
I’m a new subscriber and so far so good. We seem to be on the same page on most issues. In this article and the previous one, you mentioned the need for a progressive national sales tax. As sales taxes are always described as regressive, I am intrigued by the concept of a progressive sales tax. I’m still binge reading your past posts so perhaps you explained this in an earlier article.
Hi Carl. Thanks for reading and subscribing. You are 100% correct that sales taxes on their own are regressive because the burden falls disproportionately on the poor who have to devote much more of their income to consumption than the rich. I put the word “progressive” in front of sales tax to suggest that variable rates (rather than a fixed flat rate) would be used ensure revenue is not raised by taxing the most vulnerable on items that they need to survive. One way to do that is tax basic necessities (e.g. food, medicine, clothing) at a low or zero rates negative rate (essentially a subsidy). Luxury items or products that cause harm to public health or the environment would be taxed at significantly higher rates. More so than just raising revenue, the tax works to incentivize socially optimal behavior and internalize costs inflicted on society. Also I would include financial products as part of the sales tax since the rich funnel much of their wealth toward investment rather than consumption. Finally this sales tax would need to be paired with a wealth tax to prevent concentration of power and ownership at the top. I have not gone into depth on Substack about these tax ideas but I have been working independently to create a 20 Page Tax Code to replace the current 2,000 page behemoth with over 10,000 pages of supplementary regulations. I want those on the progressive side of the political spectrum to image ways we could restructure our tax system to increase trust in government and reverse wealth inequality in the process.
What a powerful metaphor! Even more powerful, perhaps, than the storm itself.
But for real, sorry that your area had to deal with this, and I can't imagine why burying the lines is so hard...it'd probably save the company money in the long run!
You know I can’t resist a good tortured metaphor :)Thankfully most of the power has been restored to folks in my community so life is somewhat back to normal…whether the long term problems will be fixed is a whole other issue.
Thank you. Most states and localities do this to a degree already so it should be easy to advocate. There are taxes for liquor and gas for example. I can see, though, where this might get complicated. When does a car become a luxury car? When does a refrigerator become a luxury refrigerator? It would, however, be better than the status quo.
The devil is definitely in the details, especially in drawing the line between luxury and necessity. I know $55,000 MSRP is the cut off for getting the EV tax credit on vehicles. Also too many variations and exceptions can defeat the purpose of having a straightforward tax that everyone can understand. I would set the base tax rate at 10% and allow for a total of 200 adjustments that Congress can renew or tweak every year. That way you wouldn’t have a bunch of ad hoc transactional accommodations made for specific companies like what is currently being done with the tariffs.