Observations 2
The legislature of the State of Idaho (USA) is planning to implement an increase in the sales tax of 1%.
Why?
This type of tax increase happens throughout the world not just in Idaho. Isn't 5% of all we spend on purchases enough?.. It was a year ago. When taxes are made as percentages, the revenues they generate will almost always increase over time.
- If the government raises our standard of living they will receive greater revenue. If they want more money to spend then they should help their citizens to become wealthier.
If an individual today can afford to purchase a $1000 automobile. They will pay $50 in taxes on the purchase. If in another 10 years the same the same individual can afford a much better, $10,000 automobile. They will pay $500 in taxes on the purchase.
- Inflation does not reduce the revenues.
If I bought a new bicycle and it cost me $100. The government gets 5$. If the inflation rate is 10% per year. The same bicycle a year later will cost $110. The government will get $5.50. This is fair because it costs the government 10% more to operate than it did a year before. If they get an additional tax increase of 10% to offset inflation then they will be receiving $6.05 not the $5.50 they deserve.
This also holds true for income and property tax. As we afford better homes, they get more money, and can afford better schools. Yet they often ask for more money.
I ask the question again. Why?