Choice?
Advocates for a sales tax claim it is a tax that people choose to pay. People can choose not to pay their sales tax by saving their money, the claim goes.
One TFT member, David Baker, stated it well, "People don't choose to buy food. They don't choose to buy clothes. That's ridiculous." The economic reality is the only people who have such a choice are those with higher incomes.
Tennessee relies heavily on a sales tax applied to normal consumable
items. It does not tax the purchase of stocks, bonds, savings or other investments.
This creates a tax loophole for those who can afford top invest.
Who
can afford to invest? Who has this choice?
Percentage of Families With Investments
from
the Federal Reserve Board's 1995 Survey of Consumer Finances
|
Type of Investment
|
Under $10,000
|
Family Income $25,000-49,999
|
$100,000 and more
|
|
CDs
|
7.2
|
13.7
|
21.1
|
|
Savings bonds
|
5.9
|
27.4
|
36.3
|
|
Bonds
|
*
|
3.2
|
14.5
|
|
Stocks
|
2.5
|
14.3
|
45.2
|
|
Mutual Funds
|
1.8
|
12.4
|
38.0
|
|
Retirement Accounts
|
5.9
|
52.6
|
84.6
|
|
