Sales Tax – Pros and Cons

Each state has to determine their own ways to obtain income to provide a governing body, services and goods to its people as they operate without any much interference from the Federal government. The sales tax is one such way to meet these kinds of budgets. The consumers, on the other hand don’t see this as much advantage as their incomes are also taxed.

On being questioned as to which tax is favorable to the “low incomes”, the answer surely depends on the place where you reside. In few states prescriptions, ordinary clothing and food are exempted from sales tax by which the “low incomes” can gain advantage of. On contrary to this, there are few states where even unprepared food is taxed. Such states are equitable for exchange as everything is charged with sales tax. Are there any common exemptions to all the states? Well, most of the states are losing billions and millions of money in revenue when compared to neighboring states where there is no sales tax or even if there is any, there are many exemptions to it. The Delaware state attracts people from New York, New Jersey, Pennsylvania and Maryland as they can have a tax-free shopping there. The lack of revenue due to sales tax is compensated by the gross receipts tax obtained from revenue increase. This tax is added to the numerous job retailers who are needed as additional employees for the state.

The ultimate purpose of sales tax-When looking on a large scale people having minimal cash resists buying things that are more than the original face value. It’s a fact that people don’t consider money as top priority to visit their relatives or friends who are residing in tax-free state or a lower tax-state. Needlessly, the state has quite well acquired a picture of sales tax, though money plays the important role for the consumers. The state, like big business magnets, is able to see only the present rather than foreseeing as to how a different approach can bring about a chain of events into a profitable output. Instead of generating an overall tax to necessitate the changes in economy, the state has only a general projection to generate money from various taxes. Sales tax can be substituted by a more profitable plan. This can happen only if the state foresees a big picture in the future otherwise it will remain as mere a castle in the air.