Definition ReWrite–PhillyFan321

“Regressive Tax”

In my own words, I describe a regressive tax as a tax that affects and taxes the poor more than it does to wealthier citizens. This tax can be either income, sales, excise, or property. A regressive tax can be a tax on food, clothing, gasoline or even prescription medication.

So if the government imposes a tax on certain sales, it may sound regressive. But if the tax is only on luxury items then it is not regressive. If the sales tax does not tax  basic items that people need, the cost of essential items will not go up by being taxed.People who have low incomes will not be affected by the tax of they only buy essential items (groceries, clothing, and prescription  medication).  These items listed in the previous sentence are exempt from the New Jersey 7% sales tax, the full list is in the New Jersey Sales Tax guide.According to the article,”N.J. Gas Tax Hike Deal: Christie Demanded a Sales Tax Cut, but Will You Notice It?”, the sales tax in New Jersey will go down to 6.875% on January 1, 2017.

On November 1, 2016, the State of New Jersey raised their gas tax by twenty three cents per gallon. This is a regressive tax on the poor, because paying twenty three cents per gallon takes up more income of a person making twenty thousand a year than someone making ninety thousand a year. The reason that this new gas tax is regressive is that it taxes gasoline, which is essential for transportation. Even those without cars may have to pay more for public transportation because busses require gasoline. Most people need transportation to travel to work, stores, and to visit family.  In an opinion piece,”Op-Ed: Who Pays for New Jersey’s Gas Tax?,”Raghul Murali discusses how the new gasoline excise tax will disproportionately tax a larger percentage of income for those making less than $20,000 a year than those making more than $20,000 a year. While I do understand that the government needs revenue and taxing gasoline has been around for years, a twenty three cent hike is a lot to take in for someone who does not make a lot of money.

The sales tax only applies to to luxury items. This includes, but is not limited to: prepared meals, tobacco, alcohol, and candy.  If someone chooses to pay a tax then it is not regressive, it is voluntary. A tax only on luxury items is not a regressive tax because it does not place more of a burden on the people who can least afford to pay the tax.  People with lower incomes can avoid paying this tax all together if they do not buy taxable items which they do not need to survive because non-essential items are  taxed.I think that New Jersey should not lower its sales tax at all. People will save a penny on every five dollars they spend on taxable items, many people will not even notice the change. In the article, “N.J. Gas Tax Hike Deal: Christie Demanded a Sales Tax Cut, but Will You Notice It?,”  Samantha Marcus talk about how the sales tax cut is very low and will save people very little money that they spend on taxable items.Leaving the sales tax at seven percent is  fair because it does not place a tax burden on the people with low income. I would not define the sales tax in New Jersey as regressive. Although, I would define the increased gas tax as regressive because people with lower incomes pay a higher percentage of their income on the gas tax than those with a higher income.

Works Cited

“New Jersey Sales Tax Guide.” (n.d.): Web. 30 Oct. 2016.