A SCHEME FOR A PROGRESSIVE SALES TAX I.
THE PLAN
A combination of sales tax with over-all rationing, or
rationed purchasing power.
(Basic assumptions: (1) That a sales tax of some type
WILL be passed in any case; (2) that wide-scale rationing
WILL take place.)
PROVISIONS
1. Every "income receiver" will be required
to purchase sales tax vouchers (or stamps) that must be
surrendered dollar for dollar with the purchase of any,
and all, consumer- commodities. (Coverage as in the sales
tax.) 2. To receive these vouchers he must register at a
district office where an account will be set up under his
name, as in a bank saving account. He must file a card
stating where he is employed and the sources of his
income. (AMOUNT of income need not be reported.)
3. The first $1,000 (or perhaps $750) in vouchers will
be free of taxation. They may be obtained in various
denominations.
4. Subsequent vouchers must be purchased at
progressive cost as the amount of spending increases. The
tax rate can advance with $500 or $1,000 steps.
II. THE OBJECTIVES
1. To make the spender sharply conscious of the
relation between consumer spending and the rising tax
burden. Direct incentive to keep consumer-goods spending
down in order to stay out of high rate area.
2. To avoid the excessive regressive features of the
sales tax.
3. To, at the same time, gain the advantage of an
over-all rationing of consumer goods.
4. To encourage saving and the spending of money for
non- material satisfactions: more insurance, pay off the
mortgage faster, amusements, travel.
5. To give some indirect relief to the man with heavy
fixed charges; hardship cases under high income taxation.
III. SOME DIFFICULTIES
1. Encourage bootleg market (But is that not equally
true of all comprehensive rationing?)
2. Small denominations in vouchers will be somewhat
awkward. (Stamps?)
3. Can you reach luxury living: the use of maids,
chauffeur, housemen, etc.
4. Would sale of excess vouchers by the poor be fatal?
Note:
A somewhat similar objective might be reached by
adding a section to the income tax form, requiring the
listing of all non- consumer-goods spending and
investing. A progressive expenditure tax could be levied
on the balance net income.
|