Question

Raimondo, Rubin noted that the sales tax can be made less regressive, are they right? What are some of the ways this goal can be achieved?

Answer 1

Sales tax is currently regressive. People having higher incomes spend a lower proportion and so the sale tax is supposed to be regressive as it reduces with higher income. The sales tax can be made less regressive by fixing a flat-rate of tax. Also common items used by the poor such as food, necessities and utilities are exempted from sales tax since the poor spend a larger proportion of their incomes on these items. Hence such exemptions will make sales tax more progressive.