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Originally Posted by Ample
One of my state's motto is "Home of tax free shopping"
Our state economy depends on drivers from New Jersey and Penn to buy goods in our little state. It would be pretty devastating if they didn't.
What about the states that have high property tax but maybe its attraction might be low sales tax. Like Oregon, whom is another state with no sales tax, but what I hear from my buddy that lives there high property tax. If you raise the sales tax to a "state average" really think that state can afford to loose new home buyers with the large property tax?
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I think you might be misunderstanding what the flat-tax is going to change.
The county, city, state tax basis on sales and property will NOT be affected.
The government sales tax will be added on top of existing taxes, so depending on where you live, you still will be able to spend less on taxes per-se.
As an example:
Your property is taxed by the city, county, and state on a YEARLY basis. i.e. every year you pay property tax. The federal sales tax would ONLY come into effect on the INITIAL purchase of your home. and not again.
Purchase price: $200,000.00
State sales tax 4%=8,000
city/county tax 2.5%=5,000
Federal tax(est)1.5%=3,000
Total tax spent $16,000
that is a one time charge. now AFTER that, you will still have your PROPERTY tax due, which is totally different on sales tax, so ANNUALLY you will be still paying say $2,800 to the city, county, and state for property taxes, dependent on your individual state, but the FEDERAL tax will not be imposed, because you are not PURCHASING something, you are paying a TAX, which is different.
Does that help any in understanding it?