Anniversary Post: State Sales Taxes

Sales TaxIt is very possible that on this day in 1921, West Virginia enacted the first broad sales tax. Do you know who loves the sales tax? The rich. I’m sure that the push to get sales taxes all over the United States was the result of the federal income tax enacted in 1913 via the Sixteenth Amendment. The federal income tax remains the only truly progressive tax in the United States. And the sales tax is regressive. This is why conservatives always go on about the federal income tax. They are just fine with the state sales taxes. In fact, many of them want to get rid of the federal income tax and replace it with a value added tax — basically a federal sales tax.

I should be clear, however. West Virginia legislated the sales tax at that time. But it apparently took the state forever to actually getting it working. That great bastion of liberty and supporter of the “common man,” Mississippi was the first state to actually get it going — in 1930, just when the common man could least afford it.

Here in the United States, we have a taxing system that is a mess. It is designed so as to take the maximum amount from the poor, but not make it look like this is what is happening. So everyone focuses on 15 April — the one day when our only progressive tax is collected. But every day — Every minute! — the poor and middle classes are being regressively taxed. But that’s just fairness. Unlike that terrible federal income tax, which is downright un-American!

Happy anniversary to the first broad-based sales tax — the beginning of a terrible American tradition.

8 thoughts on “Anniversary Post: State Sales Taxes

  1. Woof. I’ve been reading up a bit on the West Virginia labor-mine wars and 1921 falls exactly in the middle of when things were at the worst. So politicians took the opportunity of voters who were miners busy trying not to get shot, and voters who were scared of miners defending themselves (them hillbillies trying not to starve wuz mighty spooky), to push through a tax that benefitted rich people.

    • That’s interesting. I’m sure the state had real expenses. The problem with states is that the rich always threaten to leave the state if their taxes are raised. I largely think it is a false threat. Regardless, it is a race to the bottom. This is why we need to raise the top federal income tax margin back up to 70%.

  2. The interesting part about you bringing this repeat up is that West Virginia is going to have to grapple with a major problem soon-what to do about the fact that coal mining really does, for the environment, need to be shut down.

    Getting rid of it will have a huge impact on the taxes of the state ($308 million in 2009 although that number may have changed), the economy ($3.5 billion is generated by coal and the business that support it) and it means that a lot of people will lose their jobs from direct layoffs and multiplier job loss…there is a huge sacrifice being asked without any real plans to replace it.

    Even Clinton’s plan to do infrastructure spending is just a stop gap measure regarding job replacement. :(

    • There is a long Democratic tradition of making workers suffer for the greater good while the affluent do nothing. But I will admit that this is better than the Republican tradition of making workers suffer for no reason at all.

      We are a hugely rich nation. We don’t deal with these issues because we are psychologically blocked from thinking about them rationally. As I keep saying: I fear for the species. We are good at writing computer programs, but we’re still dogs sniffing each others’ butts.

      • You must have been feeling cheeky when you wrote that.

        We are rich nation. I recently had an argument over the issue of not firing all of the coal miners without a plan to keep them from starving to death with a Clinton supporter. I said we could afford to deal with climate change, we lack the will to. She, shall we say, disagreed. *shrugs*

        • Yeah, I don’t like to see that. There is too much “I’m an educated person and those coal miners should just get over it!” Of course, usually when the government decides to “help” it is something like giving them job training for jobs that don’t exist. We should just let them retire. As I said, we are a rich country. If the government takes your land to build a highway, they have to pay you for it. If the government takes the only job you’ve ever know because it is destroying the planet, the government should pay you for it. This isn’t hard. But as I said: it is a lack of vision — and of empathy.

          • What, just GIVE people money? So they can determine what to do with it without control? That is just crazy talk.

            • I know! But it really is true that if you want to get rid of poverty, the easiest way is to give poor people money. This whole experiment we’ve had with neoliberalism where everything has to be a bank-shot is just sad.

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