The use of Sales Tax - Essay Example

The drive of capitalism for this country relied on many factors that included slavery, turned raw goods into products, factories, and the ability to produce such a drastic workforce. Hence, Smith’s ideas of capitalism along with an adequate tax system that can power the nation in its quest to be financially solidified. The use of sales tax in America is implemented at a state level and is utilized for education, infrastructure, and Medicare. Many cities and countries have their own special rules regarding state tax.

In essence, there is no federal sales tax. Clearly, that is because the population of state tax varies based on population, deficit, and economic growth (“Rousse, 66”).  Although no clear of sales tax can be found during the revolutionary time period, the forefathers of the country did implement an excise tax on whiskey enacted in 1791. For instance, Minnesota does not have a sales tax. Sales tax is calculated by multiplying the original price of the item by a tax rate. Sales tax is also special in a fact because it is collected at the time of sale (“Rousse, 66”).

  Sales tax is unique in its manner because it is only imposed once during the time of purchase. However, this rule can be modified. For instance, items such as used cars fit this description. In this particular scenario, sales tax can be charged on the same item multiple times (“Rousse, 66”). The common example of sales tax is prevalent in grocery stores in which individuals are charged with this tax when buying their produce and groceries. Researchers that study economics have comprehensively studies the effects of sales tax have concluded that it harnesses the local economy.

One of the key elements that sales tax is utilized for is to fund education. Since sales tax is based on a state basis. Illinois is a prime example of this sales as the school system is injected with sales tax revenue (“Rousse, 66”). This is essential because the money is allocated in a very efficient manner that benefits the economy. Since the housing market is on the bubble right now, the sales tax that is derived from the properties are valuable enough to dictate funding of education. As a matter of fact, lawmakers approved sales tax as a funding source for school districts in 2007.

Since the market is on the bubble, many economists say that it makes logical sense to facilitate individuals by relying on sales tax rather than property tax. The debate over sales tax has been the hallmark of criticism and critique. Many individuals feel that the sales tax should be regressive just like the progressive tax. Many people insist that the sales tax imposes a huge burden on low-income families. In addition, the government is contemplating the decision to charge sales tax to online retailers.

During the year of 1992, the Supreme Court ruled that retailers don't have to collect sales taxes in states where they do not possess any leverage (“"Should States Require Online Retailers to Collect Sales Tax?” ). Both state and the local government has been urging Congress to repeal that decision and actually charge online retailers a sales tax as numerous bills have been proposed in Congress. Many Americans feel that shopping online is cost-effective as it allows them to skip this tax.

In essence, if an individual bought items from an online retailer, they are obligated to owe tax to state even though the states really do not have supreme authority to