How do you feel about a gas tax? You probably don't like it.
How do you feel about an online sales tax? You probably don't much care for that either.
But both are now being talked about. That is a shift! We have cut taxes on income and profits and now we're looking at raising taxes on what we buy.
This is not the way to win a popularity contest. With a consumption tax everybody pays, unlike income tax where half the country doesn't pay a dime. And, it hits poorer people harder than anyone else.
So why are these taxes being considered? Because state and federal governments need the money. We want to rebuild the military. We want to repair our roads and bridges and airports. We want to help with disaster damage. But we don't have the money. We're not going to cut spending, certainly not on Social Security or Medicare: That’s political suicide. So, we need more money.. If we don't get it, we'll be borrowing one trillion a year and that’s not going to be politically attractive either.
This is why the president talked about an extra 25 cent per gallon gas tax, and Treasury secretary Steven Mnuchin opened the conversation about online taxes. If both were put in place the deficit wouldn't come down much, but the administration would be seen to be "doing something"..... They could even masquerade as "deficit hawks."
Again, consumption taxes are not popular. Democrats hate them and conservatives don't like any new taxes.
But the point here is the shift towards taxing what we buy. The very idea of a Republican administration even thinking about this is an eye opener in itself. But, these proposals are now on the table. They are part of the conversation, as they say, after all, when governments are broke but still want to spend like drunken sailors, they'll tax anything they can.