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Comment by cwkoss | Hacker News Reader

There are many taxes besides income tax. Consumption taxes tend to hit low income people hardest.

There are several states without sales tax. Do they have better outcomes for poor people? (I have no idea... genuinely curious).

EDIT: s/income/sales

The whole United States has income tax at the federal level. I assume most states that have income tax have that tax stratified like the US does, where less money demands less percentage tax

sorry I should have said 'sales tax', a consumption tax.

The states without income tax tend to have consumption taxes that are much higher to offset them as well as property taxes. I've lived in two of them (WA, TN sans dividends) and study after study shows the poor in those states along with NV and TX are some of the worst off compared to states with income taxes because they share a disproportionate funding into state coffers compared to other quintiles when compared to states with modest income taxes. This isn't to say things are great in WV and Mississippi everywhere, but there's some commons trends across very politically different states only joined by lack of income taxes.

See my edit... I was asking about states with no sales tax. I agree that sales tax + no income tax is toxic. However, most states have sales + income tax. I'm asking if the states with income tax and no sales tax do better.

So those states are: Alaska (no sales nor income tax, but who wants to live there again? Also, they're super weird politically anyway), DE, MT, NH, OR. These states are not exactly high growth states nor bottom of the barrel in poverty, but they do have quite different politics at least so it should be a somewhat valid comparison to the consumption tax centric states.

That only means at state level and most places will add taxes at a locality level. Consumption taxes in general are popular throughout the world not necessarily because they're optimal or something like that but because they are easiest to enforce and administrate compared to income taxes. Just look at our complex federal tax code for what can degenerate within 60 years. Now, with a VAT things are somewhere in the middle between sales taxes and income taxes and is subject to the same political pressures to shift around taxation toward "less desirable" activities as deemed by politicians.

> That only means at state level and most places will add taxes at a locality level.

Oregon (my own state) has no sales tax anywhere, including localities.'

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