Posted on 01/22/2008 8:56:50 AM PST by Lucky9teen
Arizona voters may get the chance to scrap the state income tax on what they earn in favor of expanded sales taxes on what they buy.
The proposal by Rep. Rick Murphy, R-Glendale, would establish a levy on every transaction in the state. That would include not just the products subject to the current state sales tax but also services that now are exempt.
HCR2053 even would extend to wholesale transactions — purchases made by those who are not the ultimate consumers but plan to either resell the item or use the materials to make something else. These sales, too, also are not subject to the tax.
And it even would tax the sale of homes and land.
Murphy said he figures voters are sufficiently unhappy with income taxes to be willing to try something radically different. But Murphy said he believes the simplicity of the system, coupled with the fairness of it, will make believers even out of the skeptics.
But, at least for the moment, the actual cost of the levy is unclear.
Variants of the idea have been around for years. But what may give the concept some “legs” is the fact that Republican presidential hopeful Mike Huckabee has made enacting the idea on a national level a key part of his platform.
And Murphy said it will be structured so that it does not unfairly hit those at the bottom of the income scale.
He added that taxing spending rather than income would provide an incentive for people to save rather than spend.
He acknowledged that sales taxes are seen as “regressive,” taking a bigger chunk of the income of those whose earnings are below the median than those who are above. That’s one reason Arizona lawmakers agreed decades ago to exempt food from the state sales tax, an exemption that does not exist in Murphy’s plan.
Interesting development. Looks like the grassroots efforts are beginning to pay off.
Now if only our federal government would take the example. People say it won’t work but Texas, Florida and Tennessee all use this principle and it seems to work. Guess those of us who believe in the fair tax are just short sighted. {sarc.}
For years I have paid AZ income tax. In doing so, I was unable to use that money to put away for my retirement. Now, I am retired and have virtually NO income tax and they bump the sales tax. Poooop!
Yep, I would think the people living in border towns would really like this.
I don’t know... with our state income tax rates currently between 2.5% and 4.5%, and with more deductions than the feds allow, I’m not sure we’ll be better off. Meanwhile, everything will cost more. Would love to see some numbers on this.
This isn’t a sales tax- it’s a VAT. The only state that has anything approaching the VAT is Michigan. I wonder how that’s working out for them....
If your job or business/livelihood is in any way dependent on snow birds, tourism or retirees you can kiss it goodbye if this passes.
Senator McCain would vote against this.
Like those in Flagstaff & surrounding areas?
I wondered how/if this “flat tax” idea would work?
Taxing wholesale business sales is ridiculous. This would be a major ding to Arizona Businesses trying to compete with out of state comapnies and would add significantly to the cost of products. - Imaagine the government stealing their 5% at every level of the suppply chain, raw materials - rough manufacture- finish manufacture, wholesaler, retailer. Insane.
I would rather pay a $1-2K/year in AZ income tax than $32-40K sales tax on my home.
Income tax is always evil.
It allows the state to inspect all aspects of you income to see if they can fine you or jail you.
Income tax is always applied unevenly and thus is unfair.
Income tax is hidden.
A sales tax would have to be raised on all the people at the same time. This makes all the people unhappy at the same time, a nature way to keep taxes low.
Like those in Flagstaff & surrounding areas?Havasu...Grand Canyon...
People say it won’t work but Texas, Florida and Tennessee all use this principle and it seems to work. Guess those of us who believe in the fair tax are just short sighted. {sarc.}Then why isn't the Fairtax like any of them?
Do any of those states impose "sales taxes" on services? Do any of those states send out monthly checks to offset their sales tax for example?
Let me get my house sold first!
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