Monday, January 28, 2008

Insert Clever Headline Here.

I kind of like the idea of a national sales tax in place of our current income tax. That way people would all pay for what they use, as opposed to being charged by the government more for being more successful at earning money. I understand that there are people who don't like the idea. I've heard it posited that a sales tax (or a "fair tax") would disproportionately tax lower income families because they would spend a greater percentage of their income on taxes.

Retail shoppers in England have found a similar situation, though not quite tit-for-tat. The nation's second largest food retail chain has busted to the pressure and stopped charging more for larger size bras. This Yahoo news article kept us abreast of the situation. It now appears that A cups and F cups can be bosom buddies when shopping.

How is this similar to the fair tax? Well, women who buy larger bras buy more fabric, which increases the cost of manufacture. Women who buy smaller bras buy less fabric, which would cost less to manufacture. Now, women who buy smaller bras are spending more proportionately than their more endowed sisters, meaning a higher percentage of their endowment will go to line the bra manufacturer's and the department store's coffers. But, the increased sales anticipated from the larger bras will surely prevent any cleavage into the profit margins.

1 comment:

Bellejar said...

We have that here in WA as you probably know. Sales tax is 8.9 percent, but no state income taxes. You can also write off the taxes you pay from your federal taxes, standard deduction is 500 or if like me you are doing serious buying you can actually write off the full amount up to X dollars (Z being a number I don't know).

My biggest complaint is that it is regressive, which you already posted about. Disproportionately, lower income individuals bear the tax. The tax works out to a greater percent of their income. I have never really worried about it for us. The tax benefit has been great these past few years - buying a car, remodeling, building, etc.