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A National Sales Tax Would Help the Middle Class

Tue Mar 24, 2015 17:00:24PM | Categories: Sales Tax & Federal Income Tax
Shelves of packaged food inside a grocery storeBy: Downtowngal
Instituting a national sales tax has been debated, albeit halfheartedly, for years now. While I don't foresee our representatives in Washington tackling this issue anytime soon, it is still something that I've spent a lot of time thinking about, especially when it comes to the question of whether it will help or hurt the middle and lower classes.

I've heard arguments both for and against the tax that I find intriguing, but the more I read up on it, the more I find myself in favor of instituting the tax while simultaneously streamlining the Federal Income tax in a way that would make it far less complicated and do away with many of the deductions that tend to only be available for the top earners in America. However, I am not suggesting that we should exchange one for the other. I think we can actually have both and institute them in a way that will not be a burden, especially for those who aren't in the upper class.

The premise behind a national sales tax is quite simple--you pay a tax on the things you purchase. The tax that I would like to see would be progressive for different types of items. For instance, food, baby formula, clothing, and other purchases that are necessary for daily living would be taxed at a lower rate than luxury cars and private jets. The Federal Government would be responsible to determine the different rates for different items, but I think a three tiered system could work the best. That way the poor and middle class would be taxed the least amount possible for items they need to survive while the rich would be taxed more for their luxury goods that they could survive without, but choose to purchase.

Vices like alcohol and tobacco should be taxed at the highest rate because they are things that can be detrimental to society as a whole. Purchases of choice items, like movie and amusement park tickets would fall in the middle bracket. And, as I stated earlier, items that are needed for someone to just go about their daily lives would be taxed at the lowest rate.

There should also be a hefty tariff on goods built abroad and imported to the United States. That way the ultra wealthy would not be able to avoid paying the tax by having their goods built in tax havens. This would not be without precedent. America has a long history of taxing imported goods, especially when it comes to high priced items.

I know this is a very rudimentary proposal, but that is how discussions are started. What do you think? Would a national sales tax help or hurt the middle class? I believe that it will benefit the middle class far more than our current tax structure. Do you agree with me or think that there is a better way to help bring tax relief to the middle and lower classes?
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