Arizona tries for zero Income (state) tax

[Doc]

Sales tax tends to be pretty regressive. It's possible to design one that exempts store-bought food, medicine, etc., but you have to remember that West Virginia doesn't have a lot of rich to eat in the first place.

If you rank goods and services according to how necessary or how superfluous they are, with high tax rates for luxury goods and low rates for essential goods, a sales tax can become very progressive indeed. It is regressive only if you apply a flat rate to all goods and services.

Which is why I said, 'It's possible to design one that exempts store-bought food, medicine, etc., but you have to remember that West Virginia doesn't have a lot of rich to eat in the first place.'

WV does not charge sale tax for food and medicine. Fun Fact in the US on average people pay about $6,400 per year for medicine and pay about $2,500 per year for food.

[neverfail]

Consumption tax?

From past experience The USA is the country where you have three levels of government, federal, state and local, all taking turns at dipping their hands into your pocket.

It is not that taxes on average are especially high. Apparently, despite the best efforts of government over there, the sum total tax take per capita is still the lowest among the OECD countries. The problem is that the Yanks have invented a particular obnoxious way of collecting them.

Instead of (as in civilised overseas countries) simply building the tax into the overall cost of the product they wait until you front up to the counter or checkout and then add it as an unpleasant surprise. The end result is deception: the item you intend to purchase turns out to be not as cheap as it first appears.

Frankly, regards of where I am in the world, for the sake of budgeting all I simply want to know beforehand "how much is this article going to cost me in total". One thing I hate is to have to pay a non-advertised tax in addition to the advertised price when I have already committed myself to the purchase.

[SteveFoerster]

Consumption tax?

From past experience The USA is the country where you have three levels of government, federal, state and local, all taking turns at dipping their hands into your pocket.

It is not that taxes on average are especially high. Apparently, despite the best efforts of government over there, the sum total tax take per capita is still the lowest among the OECD countries. The problem is that the Yanks have invented a particular obnoxious way of collecting them.

Instead of (as in civilised overseas countries) simply building the tax into the overall cost of the product they wait until you front up to the counter or checkout and then add it as an unpleasant surprise. The end result is deception: the item you intend to purchase turns out to be not as cheap as it first appears.

Frankly, regards of where I am in the world, for the sake of budgeting all I simply want to know beforehand "how much is this article going to cost me in total". One thing I hate is to have to pay a non-advertised tax in addition to the advertised price when I have already committed myself to the purchase.

If you're surprised by sales tax more than once, ever, then that's on you.

[cassowary]

Getting to Zero in Arizona That's wonderful, if it can be done.

Article:

Gov. Katie Hobbs wants to halt Arizona’s progress toward lower tax rates, but what do Arizonans want? Republicans in the Legislature plan to put that question to voters with a ballot measure that could set the state’s income tax on a course to zero.

State Sen. J.D. Mesnard is leading a push to enact revenue triggers, which would automatically reduce Arizona’s income-tax rate each year if the state has a surplus. The state’s tax agency would measure the difference between recurring revenues and spending, and then adjust it for population growth and inflation. In the event of a surplus, it would cut the income tax by enough to reduce that surplus by half in the next year.

The plan would build on recent victories in Arizona that have reduced its low tax rate on income. Voters approved a ballot measure in 2020 that would have raised the rate to boost school spending, but the measure was challenged in court. Meanwhile, then-Gov. Doug Ducey and the GOP Legislature cut the income tax to a flat 2.5% from 4.5%. Then last year the Maricopa County Superior Court ruled that the ballot-approved tax hike violated state spending limits, which left the 2.5% flat tax in place.

Now Sen. Mesnard and fellow Republicans are betting that Arizonans have warmed to low tax rates. The tax-trigger proposal also takes the form of a ballot measure, which would be put before voters in 2024.


Offering the tax cut as a referendum would help debunk the mandate Democrats claimed from the 2020 ballot measure. Voters narrowly backed the measure, with 51.8% approving a 3.5% surtax on incomes above $250,000. But the claim that the tax is needed to fund schools was later disproved by Gov. Ducey, who boosted school funds and teacher pay despite cutting taxes.

The ballot measure is also a way to evade the veto of current Gov. Hobbs. Republicans hold two-seat majorities in Arizona’s House and Senate, and a simple legislative majority can put a measure before the public. Once approved by voters, the measure becomes law and can’t be vetoed.

Eliminating the income tax is far better than even a low 2.5% rate, because it is harder politically to revive the tax than raise the rate. Let’s hope voters get a chance to make their preferences known next year.

My Comments:

The Governor, Katie Hobbs is a Democrat but the state Congress is majority Republican. The Republicans control a majority of state senators and members of the lower House. So, again, you have a divided government.

West Virginia is considering going without an income tax as well and substituting a sales tax like Texas does. No idea if it will be adopted as they are just discussing it, trying to figure out what form it will take.

https://www.washingtonexaminer.com/poli ... ssions-end

West Virginia legislature passes budget, fails to pass income tax reduction at session’s end

Whether it’s in on tax or sales tax, it’s the rich who will end up paying more.

Sales tax tends to be pretty regressive. It's possible to design one that exempts store-bought food, medicine, etc., but you have to remember that West Virginia doesn't have a lot of rich to eat in the first place.

I have heard sales tax is regressive but I cannot understand why. Since the rich got more money to buy things, they will end up paying more.

In my country, there is a further protection for the poor. These folks get subsidies to offset the sales tax. This is better than no sales tax for food and medicine. The rich can afford to pay for this. So why exempt them?

[neverfail]

I have heard sales tax is regressive but I cannot understand why. Since the rich got more money to buy things, they will end up paying more.

Yes it is; and it is not very hard to figure out why. Can't you see the obvious?

In relation to the size of their incomes the poor spend a lot more than the wealthy do. They have no choice as their spending is often wholly on necessaties.

What the rich spend is predominantly on luxary good and indulgences: and normally consumes a much smaller prportion of their incomes.

The outcome = the poor get hit harder by consumption tax.