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Norm Conrad's avatar

And the federal govt. could send more money to the states via revenue sharing with the stipulation that state taxes are not reduced.

The legislature in Washington created a Working Group a year or so ago to look into tax reforms for both business and individuals. They quickly shelved any form of individual income tax because, as one member declared, "they tend to increase over time." WA has no income tax but has a hefty sales tax. What the Working Group ignored is that this state's sales tax routinely increases over time.

IMO the sales tax should be abolished and replaced with a progressive income tax. But there is a state constitutional provision requiring equal rates that seems to prohibit a progressive tax. That ignores the unequal impact of a sales tax which runs, on average as a percentage of income, from INFINITE on those unemployed and not receiving unemployment benefits (72% of the unemployed nationally and in WA) to about 15% for low-income workers and less than 2% for Washington's top tier of income recipients. This state also has a revenue tax on businesses. Most or all of the majors here find a way to legally conduct business elsewhere. Boeing, which moved its HQ to a state WITH an income tax, has been reported to routinely sign many or most of its contracts for new planes at 30,000 feet over international waters.

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Peter Paul Santa Ana's avatar

From a strategic standpoint, the US would do well to nationalize education to educate & pay teachers more effectively with living wages, eliminate systemic racists educational barriers, and solidify investment in our kid’s education just to start. Only MMT offers the economic understanding to make this policy a reality. I’d appreciate reading your reviews of such a policy through the MMT Lens.

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