The proposal, if the committee bites and serves it up to the full Legislature to consider, could replace the state's current recession-resistant slate of taxes - sales, income and property - with a single tax on goods and services.
Perish the thought.
A consumption tax would be revenue-neutral, meaning the state would attempt to generate no more, and no less, than it's collecting now. So the tax would have to be high, drastically increasing the price of everything from luxury items to the food and clothing that we all need to survive. Unless something were done to mitigate the impact on people living paycheck to paycheck - rebates based on income levels, or tax exemptions for the necessities of life - folks of limited and moderate means might be forced to pack up and leave.
If lawmakers want the poor to get poorer at a time when income disparity is already growing; if they want to shift a higher proportion of the tax burden onto the backs of those least able to pay; if they want to discard a balanced budgetary diet in favor of a single food source that would starve the state treasury when the economy slumps and spending declines; if they want to jeopardize the delivery of vital state services during times when they're needed most; then by all means, they need to keep the consumption tax on the plate.
But if they have a heart, and an ounce of common sense, they'll toss the consumption tax proposal in the trash.
It's a regressive tax, a tax that takes a higher percentage of income from the indigent than the well-to-do, while encouraging the wealthy to invest and save instead of spending their money and stimulating the economy.
The tax system we have already works, and works well.
The income tax collects the most from those most able to pay. The property tax remains stable, providing steady income in tough economic times. And the sales tax appeases people who insist that everyone, regardless of their income level, contribute to the common cause, whether they're buying diamonds or costume jewelry, filet mignon or mac and cheese.
