Sales tax

 

A sales tax is levied on a commodity which is sold to its final consumer. Some critics insist that sales taxes discourage retail sales. It is frequently discussed whether they are generally progressive or regressive. A flat-rate sales tax tends to be regressive as people with higher earnings pay a lower proportion of their incomes. As a result, food, utilities and other necessities are released from sales taxes because poorer people spend a higher proportion of their incomes on buying these commodities. This makes the tax more progressive. There is a small number of US states which rely on sales taxes, as those states do not levy a state income tax. These states tend to enlarge sensibly tourism or inter-state travel to allow the state to benefit from taxes paid by people who would not be taxed otherwise. This action allows decreasing the height of the tax burden on its citizens. There is a growing movement which proposes a Fair Tax. They demand that payroll and income taxes be replaced with a national retail sales tax and monthly tax rebate to households of citizens and legal resident aliens.
In Canada there is the federal sales tax called the Goods and Services tax. Excepting Alberta, Canadian provinces have ratified a provincial sales tax. It means that most businesses have an opportunity to regain the taxes paid; as a consequence, the final consumer pays the tax.