A Sign?

I received this e-mail from the California Department of Finance. I signed up months ago for the DOF monthly bulletin, but I don’t think I’ve ever received it.

Then this message arrived, and ironically, it speaks volumes about California’s tax revenue collections for the month of September. (Hint: there’s no good news to report.)

In other news, California’s independent tax commission is floating the idea of eliminating the state’s income and sales taxes and replacing them with a 4% Business Net Receipts Tax, which would in effect spread the cost of taxation out over a much wider populace.

Very little would be deductible from the tax, so in effect, most businesses would raise prices by about 4% to cover the cost.

What do you think of this style of tax? Would you trade income and sales taxes for it?

joshwinn

Yes.

Also, being in Europe right now makes me wish, like I have since I was a kid, that the posted price on things in the US&A would be THE ACTUAL PRICE!!! Things are strangely expensive here, but at least you don't need to calculate a tax on top of what you see posted.
http://www.aaronklein.com aaronklein

Ah, that's an interesting point I hadn't thought of.

I always add 10% here. It's getting awfully close to being dead on!
quizwedge

I like the idea, so long as it doesn't apply to food. It rewards savings, isn't so hard on the poor (if it doesn't apply to food), and would be less than current sales tax. Of course, if I wasn't self employed, I'd use this to request a raise since my employer would no longer be paying their half of my income tax.

I also agree with joshwinn about posting the actual price.
http://www.aaronklein.com aaronklein

The thing about this proposal is that it applies to everything. Hence the simplicity and spreading a smaller amount of taxation around to everyone. Every business has to pay the 4% on their revenues, and very little is deductible.

And actually, this wouldn't touch the “employer” payroll taxes — the employer pays none of your state income tax, which this would replace. I think it's just Social Security that the employer contributes to.

But you should get the raise anyway, because your state income tax would stop deducting out of your side of the pay check.

A Sign?

Markets change. Do your investments still fit you?

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