First, I'll slip in the observation that you've implicitly acknowledged that taxes *do* harm people. I imagine that you'd admit to that, but say that it's a necessary evil, and we shouldn't make the weakest elements of our society be harmed by them even more than the rich folk.
Some of that is painting with too broad a brush. And evil is much too strong and emotional a word to be used in this context. (I also consider the phrase "necessary evil" to be an oxymoron - but lets save that for different discussion.)
I would say that:
taxes have a measurable impact on peoples lives
some people will have their living standard negatively impacted by taxes
taxation's negative impact affects people disproportionately
and those people most negatively impacted by taxes are primarily found in a society's lower economic stratas
I would say that just as each member of a society owes a basic but very real debt to the society they are a part of; so too does that same society have an obligation, in return, to do all that is humanly possible to ensure a decent and dignified standard of living for all
I would also disagree that the above must
therefor embrace the notion of "entitlement" (as some would insist) in order for it to accomplish that goal.
Ok, the tax issue:
Regarding taxes on food, this
is CT current tax rule.If you glance through it I think you can see that much in it will hit the poorer elements of society in that the items generally non-taxable are not ready to eat. Most non-taxable foods will require some preparation prior to consumption. Something not always possible for many low-income apartment or rooming house dwellers, many who don't have kitchen privileges. And thats also something bordering on impossible for virtually anybody who is homeless.
Personal Care Items
The 6% sales tax applies to shampoo, shaving cream, cosmetics, hair care products, toothpaste, and other personal care items sold in retail stores. But such products are not taxed if sold:
1. to federal, state, or local governments or one of their agencies (§ 12-412 (1));
2. to or by a nonprofit charitable hospital, nursing home, rest home, or residential care home (§ 12-412 (5));
3. to any charitable, religious, or similar organization exempt from federal income taxes (§ 12-412 ();
4. for $20 or less by any Connecticut nonprofit organization or school for support of youth or student activities (§ 12-412 (26));
5. for 50¢ or less from a vending machine or unattended honor box (§ 12-412 (27));
6. to a center of service for elderly persons (§ 12-412 (35));
7. for $100 or less through a gift shop in a nursing home, rest home, residential care home, convalescent home, or adult day care center, if the profits from the sales are used for the benefit of the residents or people using the center (§ 12-412 (56));
8. by nonprofit organizations at bazaars, fairs, picnics, tag sales, or similar events held no more than five times per year (§ 12-412 (94)); or
9. by an historical society (§ 12-412 (98)).
So as you can see, any personal care items purchased at a discount store or pharmacy are taxable in CT.
The exemption for nonprescription drugs and medicines, and smoking cessation products is repealed effective July 1, 2011 (pursuant to 2011 Conn. Pub. Acts 6)
Prescription medication and most medical equipment is currently tax free in CT. List here
. But over the counter medications, nutritional supplements, cold remedies, pain relievers, etc. (which are the types of medications most lower income people use) are all subject to sales tax. That exemption was repealed two years ago. (See alert at top of published reg.)
Effective July 1, 2011, the sales tax exemption for clothing and footwear under $50 is repealed. The general sales tax rate of 6.35% applies to most sales of clothing and footwear.
A tax rate of 7% applies to the sale for more than $1,000 of an article of clothing or footwear intended to be worn on or about the human body, a handbag, luggage, umbrella, wallet or watch.
So virtually all clothing in CT is subject to a full sales tax treatment. The sole exception is a one week amnesty period
at the end of the summer. This is often referred to as the "back to school" tax break. Supposedly it was enacted to allow parents of growing children a break on clothing purchased for the upcoming school year. Most view it more as a bone thrown to clothing retailers since clothing and shoe prices all mysteriously seem to go (and stay) up a few percentage points around the end of July each year.
There's also good chance this tax break will be repealed sometime either this year or next.
Rent is not taxable in CT. But property taxes have skyrocketed throughout the state since CT has significantly reduced the amount it gives back to municipalities in order to provide mandated
services - because it has had its own check sliced by the federal government who needs money for corporate bailouts, to replace monies not paid which have now underfunded its own employee retirement plans, plus the never ending need for newer bombs, attack drone planes, super carriers, and other much more important things like that.
Unfortunately, there is no rent control in CT. So all increases in taxes, permits, maintenance, and utilities get passed directly back to the renters. Because the state pays fixed rental fees for those on public assistance, many former low-income dwellings are being gentrified or converted into condos. With a result, the amount of available public housing and qualifying "rent assistance" apartments in CT are dwindling. The average waiting period from the application to the granting of a request for public housing or rent assistance is roughly 5 years in CT. (Note: if approved for rent assistance in CT, it is the also responsibility of the renter
to find a qualifying apartment. The state does not
So in light of the above, I think it safe to say taxes definitely have an adverse and disproportionate impact on lower income people CT.
You're also assuming that the portion of the rich guy's income that's not being spent on essentials will escape taxation. But in fact, Daddy Warbucks will either be spending his money (in which case it still gets taxed, so he winds up paying tremendously more), or it gets invested. And encouraging investment is a very good thing, because it leads to greater productivity, more jobs, etc.
Oh lordy, lordy, Lady Diana!
Is that the old "trickle down economy" argument? I have a bloody degree in accounting - and many years in Fortune 5 (not 500) corporate finance, so please... I know
how these people think. And that's because (to my lasting shame) I was once one of them.
Ah me! I thought that
fairy tale was debunked and put to bed once and for all when
Ronnie Regan went to Washington.
During the big run-up in the 80s and 90s, the biggest beneficiaries were: banks, arbitragers, junk bond merchants and Japanese and German sports car manufacturers. (Things which cost taxpayer billions on bailouts, naive investors millions in savings - and absolutely gutted the American automobile industry which caused the permanent loss of thousands of formerly well paying jobs.)
When Daddy has "fun" money to spend he's not going down to a local store to buy a new dish washer or sofa set. He's buying foreign made luxury goods, imported diamonds, South African gold - or spending money overseas leasing some exclusive resort condo on the Côte d'Azur. Assuming, that is, he doesn't just buy one outright.
And if Daddy Warbucks has an extra few millions
to spend, he's certainly not going to invest it here! He can get a ten to fifty times better return on investment using it to shut down a US business - and then move the operation over to Asia or Indochina in order to cash in on that "slave in everything but name" labor market.
Sorry if I appear to be crying "Bollocks!!!" and come across as being cynical.
It only looks that way because I am
@CW - Sorry if I also sound overly harsh about this item. None of my spleen is directed at you personally. It's just I saw what that silly myth did to business and society back in the 80s. And I can only hope "we don't get fooled again."