Will States Replace Income Tax With Higher Sales Taxes?
Happy New Year, again. Once we moved into January, seems like every state Governor has proposed some type of change to their tax system. Some major, some minor, but a lot of them are looking at increasing sales tax rates and/or even the what types of items or services sales tax will be imposed on.
Read the recent New York Times article about how states seem to want to move away from an income tax and increase their sales tax rates. The article seems to suggest that this philosophy has something to do with the idea of moving away from a tax on income, to a tax on consumption (similar to the broader idea of a federal consumption tax).
What do you think?
Should states eliminate their income tax structures and rely on a higher rate, broader base sales tax?
Will these proposals gain any traction and actually get passed?
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at email@example.com.
Because state and local taxes are deceptively simple and endlessly complicated.