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A sales tax would be too high of a percentage to replace the income tax. This conclusion comes from a simple arithmetic, but still, I may have missed something.The total income tax revenue for 2008 was $1.03 TrillionThe total amount Americans spent was $4.4 T. (US Census Bureau)The percent sales tax to equal the income tax would be 1.03/4.4 = 23.4%.The total government receipts was $2.17 T, which means 1.14 T came from other revenue sources. I will assume that is the same.So the conclusion is that if we were to replace income tax with a sales tax, the sales tax would have to be 23.4%. That's way too high. It shows what we already guessed that the poor buy a lot more stuff as a percentage of their income than the wealthy. The average household spends 78% of their income.
A sales tax would be too high of a percentage to replace the income tax. This conclusion comes from a simple arithmetic, but still, I may have missed something.
The total income tax revenue for 2008 was $1.03 Trillion
The total amount Americans spent was $4.4 T. (US Census Bureau)
The percent sales tax to equal the income tax would be 1.03/4.4 = 23.4%.
The total government receipts was $2.17 T, which means 1.14 T came from other revenue sources. I will assume that is the same.
So the conclusion is that if we were to replace income tax with a sales tax, the sales tax would have to be 23.4%. That's way too high. It shows what we already guessed that the poor buy a lot more stuff as a percentage of their income than the wealthy. The average household spends 78% of their income.
