STATE AND LOCAL FINANCE
Something to Think About --
Doing the Math
Assume a neighbor earns $1 million annually and you earn $30,000.
You buy a used Ford Escort for $10,000. With a sales tax of 7% you pay $700 in sales tax; this is 2.3 percent of your yearly income. Your neighbor buys a new BMW for $40,000; he pays $2,800 in sales tax or 3/10 of 1 percent (0.3%) of his income for the tax on his car purchase.
You each need a new refrigerator and purchase the same model for $900. About $63 in sales tax is almost 11 percent of your weekly paycheck. Your richer neighbor pays 1/3 of 1 percent of his weekly paycheck in sales tax for the same item.
You are contributing 12 times as much of your income in sales tax to support your state government as your neighbor, despite the fact that his income far exceeds yours. It quickly becomes apparent that the sales tax has a far greater impact on the middle class and working poor than on the wealthy.
--From Dick Seeley, LWV Glendale/Burbank
