Progressive Taxes Are Better Than Taxes That Squeeze the Poor

By Thomas J. Fisher for Kandit News & Views

I can never quite tell whether the MAGA crowd is cynical, ironic or stupid. Perhaps a mix of the three, although irony demands a bit of self-awareness not usually found among them.

Here’s an example; Senator Chris Duenas is on record as saying Guam should convert to a sales tax and that “leveling the playing field is needed.” Far from leveling the field, sales taxes merely perpetuate the structural imbalance of the present system. Senator Duenas, do you understand that sales taxes are regressive? They disproportionately fall on the poor and those with lower incomes. A four per cent sales tax for example consumes a greater percentage of a poor man’s purse than a rich man’s. Regressive taxes are assessed equally regardless of income, so low and high-income earners pay the same dollar amount. Sales taxes place a bigger burden on low-income earners than on high-income earners because the same dollar amount equates to a much larger percentage of total income. For example, a poor man pays the same tax on a loaf of bread as a rich man. For the rich, the burden is barely felt, for the poor it can be devastating.

This is cynical if the MAGA crowd thinks people don’t smell a rat here; cynical and ironic if it believes further handouts to the rich and well-to-do amounts to “leveling the playing field”, and merely stupid if they think people don’t see through the flim-flammery.

Today we pay a four per cent business privilege tax (also regressive). Under Senator Duenas’ proposed sales tax, businesses will no longer pay the business privilege tax but needn’t roll back prices. A windfall for all our businesses but a kick in the backside for the people who can least afford it. Business pockets the four per cent increase and the consumer pays the tax at the register. This is a peculiar playing field. If the 38th Guam legislature insists upon this hostile shake-down of the people, at least they could exempt certain goods, e.g. clothing, food and medicine, from the sweep of the tax. This should make the senators think well of themselves.

Tax policy is complicated, but it is the chief tool we use to shape our community. We use it to decide who will receive government services and who will pay. As the bright and knowledgeable begin their tinkering with the system I hope they will remember that progressive taxes are always better.

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Thomas J. Fisher is a member of the 37th Guam Legislature and a defense attorney. He has been a prosecutor and is a veteran of the United States Navy.