Sales Taxation

Paper Summary:

This paper examines sales tax and how it is often defined by economists as a regressive tax. The paper discusses how sales tax works and why some states in the United states have chosen to have no sales tax or to offer sales tax exemptions on necessary goods. The paper then focuses on sales tax on clothing and the concept of the sales tax holiday.

From the Paper:

"But why places a sales tax on clothing, any form of clothing at all? Making the exemption on clothing on items only below a certain amount seems arbitrary. Perhaps shoes in excess of $110 in New York City or $75 in the state of Connectivity seem like luxuries but the same may not be true of a new winter coat or sturdy pair of books, or even basic athletic equipment not provided by the school for a child, such as running shoes. A parent of modest means might still find him or herself unduly penalized. Imposing price ceilings upon certain goods rather than a uniform price ceiling on the sales tax, such as children's school uniforms would likewise not cover all of parent's spending needs for their children, nor even adult's basic needs in excess of $110 or $75 for certain items. Thus, despite the revenue loss to the state, in the interest of fairness, the elimination of sales tax on clothing would be beneficial, and might help consumers and retailers alike, as more price-sensitive consumers might be more willing to buy slightly more costly, but high-quality goods in excess of $110 in New York State and $75 in the state of Connecticut."

Sample of Sources Used:

• Chamberlain, Andrew. (31 Dec 2006)." New York Democrats call for permanent sales tax holiday." Tax Policy Blog: Official weblog of the Tax Foundation. Retrieved 15 Sept 2008. http://www.taxfoundation.org/blog/show/1325.html
• De La Torre, Vanessa. (2008). "State's tax holiday on clothes, shoes begins Sunday." The Hartford Courant. Retrieved 15 Sept 2008. http://www.courant.com/news/local/hc-cttaxfree0816.artaug16,0,2152521.story?track=rss
• "Exemptions from sales and use taxes." (2008). The State of Connecticut: Department of Revenue. Retrieved 15 Sept 2008. http://www.ct.gov/drs/cwp/view.asp?a=1477&q=269920
• "Sales and use taxes." (2008). NYC Finance. Retrieved 15 Sept 2008. http://www.nyc.gov/html/dof/html/business/business_tax_nys_sales.shtml

More papers on Sales Taxation:

• Article Review # 124819 : "Economic Articles on Taxation"
• Term Paper # 75727 : "National Retails Sales Tax "
• Article Review # 64747 : "Taxation"

APA Citation:

MLA Citation: