Sales taxes negatively affect the economy, disproportionately hurt the poor and lower middle class, and are an unreliable source of revenue for governments.
Whether it is to fund road repair and construction, local jails, or supplement public school funding, politicians are enamored with sales taxes. A penny here and a penny there taken from the pockets of consumers, they argue, cannot be harmful. Yet there are compelling arguments that sales taxes have a depressive effect on the economy, disproportionately affect the poor and lower middle class, and are not a reliable source of revenue.
Far too often, politicians use deceptive tactics to get sales tax increases approved. Before voting on any sales tax increase, voters deserve to consider the following reasons why sales taxes should be rejected.
1. Sales taxes punish consumer spending and hurt the local economy.
It is generally understood that taxes influence behavior, and that we get less of a behavior when it is taxed. That is why activists demand high taxes on cigarette and alcohol sales. Their goal is to make those products more expensive so that less people will be inclined to purchase them. Why then do we tax consumer spending generally?