Following up on my comments from yesterday about taxes, here is an article from the Sacramento Bee on tax reforms:
As the debate continues, it's worth recalling what share of income Californians pay in taxes – including income, property, sales and excise taxes (such as alcohol, tobacco and gasoline taxes).
The latest California Budget Project update – "Who Pays Taxes in California?" – shows that lower- and middle-income families pay a larger share of their income in state and local taxes than higher-income residents.
Of course, higher-income California families pay a greater share of their income in income taxes. But lower- and middle-income families pay a greater percentage of their income on property, sales and excise taxes. As the accompanying chart shows, the higher you move on the income scale, the less share of your income you pay in California taxes.
An ideal tax system would be flat overall, with progressive income taxes offsetting regressive property, sales and excise taxes. That way, each income group would pay a similar share of income in taxes.
Should this kind of thinking apply outside of taxes? When one walks into a McDonald's, Starbucks, or Toyota, should a means test be applied before the price is determined? Is it fair that Bill Gates pays less as a percentage of his income (or net worth) for a Big Mac than the worker bee making $50,000 a year? Could you imagine the chaos and frustration by retailers trying to evaluate one's income statement? That'd really slow down the drive-thru lane.
Maybe that's why the tax code is so complicated.