April 19, 2011

The Logic of Taking Your Money

Justin Katz

I don't want to let this one go without highlighting:

Just two people testified in favor of the governor's plan, out of more than 96 who signed up to speak.

The other was Kate Brock, of the pro-union advocacy group Ocean State Action, who questioned why the state taxes a lawnmower but not landscapers, or why it taxes nail polish but not a nail salon. "It is illogical to tax a good but not a service that results in the same outcome."

One suspects that Ms. Brock might find it further illogical to tax the landscapers but not the air that they breathe. After all, taxation is the singular purpose of government, right?

Do you think it'd do any good to point out to Brock the landscapers are taxed via their income? You know, as workers and individuals rather than as purchasable goods.

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It would do no good to point anything out to Ms. Brock. She wants to redistribute the money earned by private businesses and their workers to those on the public dole: state and muni workers and officials and all the others in similar taxpayer funded entitlement programs.

Posted by: riborn at April 19, 2011 1:24 PM

So a retailer is taxed on sales and on income but a service company is taxed only on income... and you don't see Brock's point? Come on, Justin. You're just swinging wildly on this one.

Posted by: Russ at April 19, 2011 1:51 PM


I'd be happy to eliminate the income tax altogether, if you like, and then perhaps there'd be an argument for a service tax. But the retailer is taxed on the items that he sells, not the service of selling it.

Perhaps there's no room for that distinction in your worldview, but it's real. The landscaper in Brock's example isn't selling his lawnmower; the lawnmower is a tool of his trade, and he pays a tax when he purchases it (as well as depreciating property taxes, in some places) Similarly, the retailer isn't selling his cash register; it's a tool of his trade.

Posted by: Justin Katz at April 19, 2011 5:27 PM

Why can't we just go to a GST only economy? No tax except on sales. Make it a different amount depending on the scale between "necessity" and "toy".

Posted by: Patrick at April 20, 2011 8:49 AM
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