Sales tax and its cousin, the Value Add Tax (VAT), are regressive taxes on purchasing. While the wealthiest can hold stocks, bonds, and large money market accounts, the poor and middle-class must purchase. As a result, the poor and middle-class always pay the most sales tax and VAT, creating an extreme regressive tax system in most States.
Many tax protesters suggest income taxes drive away higher-income earners. A closer look at the evidence directly opposes this suggestion—and, in fact, the opposite often occurs. Housing costs and climate influence moves between jurisdiction the most. The deterioration of infrastructure and economy can drive away the wealthiest and leave behind the poorest, a notable effect of cutting taxes and failing to fund infrastructure, welfare, and economic development programs.
Regressive sales taxes and VAT must give way to progressive income tax policies in each State and in each local ordinance. Such taxes should apply carefully where an alternative motive exists, such as the excise taxes on alcohol and cigarettes; and even then, we must consider the economic impacts on the consumers and seek less-harmful alternatives to achieve behavioral modification.