I have an idea that is radical, and I am sure many people will disagree. However, it will solve a number of problems. I will suggest a national sales tax. There will be two types. Standard, and Luxury. Standard Sales tax is imposed on most things, while luxury is imposed on very high end things, as well as tobacco, and alcohol. The extra money gained on the tax on alcohol, and tobacco can be used for prevention programs. There are only two exclusions from paying sales taxes. One is business to business purchases where there is going to be a resale. In example, a computer store may buy a computer from a supplier, and not pay sales tax if that will be resold. However, if it is used within the business, then there is a sales tax. The second option is person to person resale of used items.
Now, the standard sales tax could be set at 30% with 5% going to the state government. Luxury could be set at 45% with 10% going to state government. Now, this sounds like a lot of money, and in reality, it is. However, in turn – there will be no income tax. Think of it, most people pay about 25% in taxes off of their paychecks. Therefore, they are getting very close to gross which means much of the money is now going to sales taxes. There is an issue of this being too costly for people in poverty, but I will get to that in a moment.
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