The fallacy of sales tax is in that it is a flat tax. The rich and the poor get the same rate. If it the same for all of us, it is not fair. Think of a case like this:
An average worker thinking of doing a grocery shopping. His budget is $50. If the sales tax is 10%, then the amount that he can use is $45. Instead of $50, he must manage his shopping at $45. What can $5 buy? A loaf of bread, and milk?
An exceptionally rich person thinking of going for lunch. His budget is $100. If the sales tax is 10%, then he still can use $90. What can $90 buy? He must and perhaps can manage his lunch at $90.
Think of the above situation and think of charging the $100 lunch person a little more -- $5. His budget is going to be $85. Instead of $100 lunch, his lunch is going to be $85. By that, the $50 grocery person can buy a loaf of bread and milk.
A flat tax is unfair tax. What of a case with the person shops at $5000 level, and thinking $4500, or $4495 shopping instead. Just by making it $4495 instead $4500, the $50 grocery shopping person can buy a loaf of bread and a carton of milk.
The equal rate is not equal. The same rate does not mean the same. The flat tax is good for the rich and not for the poor.
An average worker thinking of doing a grocery shopping. His budget is $50. If the sales tax is 10%, then the amount that he can use is $45. Instead of $50, he must manage his shopping at $45. What can $5 buy? A loaf of bread, and milk?
An exceptionally rich person thinking of going for lunch. His budget is $100. If the sales tax is 10%, then he still can use $90. What can $90 buy? He must and perhaps can manage his lunch at $90.
Think of the above situation and think of charging the $100 lunch person a little more -- $5. His budget is going to be $85. Instead of $100 lunch, his lunch is going to be $85. By that, the $50 grocery person can buy a loaf of bread and milk.
A flat tax is unfair tax. What of a case with the person shops at $5000 level, and thinking $4500, or $4495 shopping instead. Just by making it $4495 instead $4500, the $50 grocery shopping person can buy a loaf of bread and a carton of milk.
The equal rate is not equal. The same rate does not mean the same. The flat tax is good for the rich and not for the poor.