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Should local sales tax be increased or decreased

Content of the problem

Currently, taxes added on top of prices of goods or services that are purchased within a country are either being increased or decreased depending on the country. Sale tax is a consumption that is displayed as a percentage of the sale price. It is vital to assess sale taxes in every state, county or municipal level in order to determine the amount that is being taxed and can help in knowing whether to increase or to decrease. The biggest problem with sales tax evaluation is the state-local tax burden due to increasing population and changes in the tax policies is also another area that is supposed to be considered.

In the past it was a bit different since most of the states’ population was not so high and thus it was easy to determine whether sales tax be increased or decreased. But as time has moved, this has been witnessed to have taken another different direction and the states’ population must be put into consideration since most of this has to determine the increase or decrease of sale tax in every state (Frederick, 315).

Statement of the problem

In the today’s world, employment has hit and most of the people graduate and do not get job and thus imposing sales tax on such people may deem to be the biggest problem. The tax imposed on property is also important on the other hand as it helps in ensuring that it is used in curing the budget. This is due to the fact that revenue gotten from corporate net is usually viewed as volatile, especially in cases whereby recession and therefore it will be unworthy to states to lean heavily on it.

Even though the income tax increase helps in budget deficit, raising the income tax by even just 5% would lead to a drop on the tax Foundation’s Tax Climate Index. This may also lead to not having lower personal income tax in such regions.  This may also lead to the corporate income tax to drop even further. And also, in increasing the tax of corporate income may set a state an even bigger fall in the future and that is really a demerit. This paper will look at the barriers of sales tax increase and decrease since this is a tool that will in turn help in determining whether to increase or decrease sales tax in any state. This can be done through in co-operating some programs into the scheme of sale tax evaluation system.

Research question

Given that it is important to determine whether to increase or decrease the sales tax in any given state; there are a number of questions that must be put into consideration. Since sale tax is also important to the government, it is vital for the government to treat those contributing to tax revenue as important figures in the society. This in turn will make not to appear as a burden to those contributing to sale tax (Merriman, 21). Nonetheless, in order to gather the required information regarding sales tax increase or decrease it is vital to address the following questions during the research process:

a)      How imperative is tax reduction or increase to both the government and the citizens?

b)      Are there some economy tax credit programs that can be employed instead of just increasing or decreasing the sales tax and how is it helpful to the common man?

c)      What is the purpose of considering change in tax policy and can this help in tax expenditure justification?

d)     What are the cautions for both tax increase and tax decrease?   


Significance of the study

According to research carried by Arnold in 2004, (228) in both the United States and the whole world at large it is vital not to impose so much tax on the common man as this will have tremendous effect in future, either positive or negative. Even though most citizens suffer from high taxation, it is vital not to increase the sales tax to the common man and impose tax on goods and services rendered internationally.

This proposal aims at looking into ways in which sales tax can be imposed without causing any havoc to the common man and thus improves the economy of the country. This must also focus on developing a positive attitude to those imposing tax on property without experiencing state-local tax burden. This is important since it is used to determine how Tax Foundation yearly calculation concerning how heavy the state-local tax burden is for the population in any given state (Rodgers, 229).

Objectives of the study

Just like any incentive program, it is vital to look at the objectives, basically in numeric terms. This specifically helps in determining the final result such as increasing sales, or purchase by your reseller. Some of the objectives include:


i)        Obtaining a certain percentage of shares for a new product in its full year.

ii)      Increasing the percentage of sales.

iii)    Increase the number of showroom displays in both local and international market.

iv)    Increase the number of people participating in product training programs. 


Research Design and Methodology

This research study will focus on both the quantitative and qualitative approach since it requires collection of data and carrying out of surveys in relation to the past sales tax estimations and calculations. Another approach will be the descriptive since it will require first hand information from previous research in order to avoid misunderstanding. Finally the research will carry our surveys by interviewing the concerned using semi-structured questioners. 


It is vital to look at the disadvantages and advantages associated with sales tax increase and decrease. This is likely to help determine which one is the most appropriate option. All in all it is also significant to understand the limitation of the research process since it can be applied as a cautionary measure before deciding on which way to go. It is vital to understand that fiscal problems should not be addressed by tax alone (Arnold, 229).


Work Cited

Arnold, Raphaelson, "The Property Tax," in J. Richard Aronson and Eli Schwartz, eds., Management Policies in Local Government Finances, 3rd edition, (2004) p. 229

Frederick, Stocker. "Diversification of the Local Revenue System: Income and Sales Taxes, User Charges, Federal Grants," National Tax Journal, September (2006), p. 315

Merriman, David. The Control of Municipal Budgets: Toward the Effective Design of Tax and Expenditure Limitations. (New York: Quorum Books, (2001), pp. 20-23

Rodgers, James. "Sales Taxes, Income Taxes, and Other Nonproperty Revenues, " in J. Richard Aronson and Eli Schwartz, eds., Management Policies in Local Government Finance, Third Edition (Washington, DC: International City Management Association, (1997), p. 229.

Sherwood-Call, "The Labor Tax as an Alternative Revenue Source," Proceedings of the Seventy-Ninth Annual Conference (Columbus, OH: National Tax Association, (2002), pp. 86-93

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