Slower Growth in Sales Tax Revenues for States Tied to Growing Inequality in Income
Widening inequality in income is taking a toll on the sales tax revenues of many states.
One among those states is Washington, and it depends highly on sales taxes as its source of income. A decline in these funds, have been attributed to the concentration of wealth among the few richest households in the country by a new report.
The study by Standard & Poor's the credit-ratings agency revealed a noteworthy turn down in the growth of average annual state tax among the ten most sales tax-dependent states. Washington is one of them.
That report relates the slack in growth to the growing inequality of income. The richer getting more rich but does not spend a larger share where as the poorer grows poor and does not have enough money to spend which in turn stunts the overall economic growth.
The main driver of economic activities is consumer spending. In the recent years consumers have turned out to be very cautious about their spending as average incomes have hardly grown in three decades and still remain lesser than what they looked like 2007 before the starting of the Great Recession.
New Zealand News
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