WA state income tax???

[EconE]

[WestSideBilly]

Pretty much.


The luxury tax is an extreme example of why high consumption taxes are a poor revenue source. If taxes are high enough, it justifies traveling to low-consumption-tax areas, whether that be across the river to Oregon, or across the border to Canada, or across the ocean to Asia or Europe. How many people do you know will travel to Portland (3.5 hours each way) to buy a $4000 TV (spending $50 on gas to save $350 on tax)?

Now imagine if our consumption tax was 20%. Granted, it's hard to get some things through customs, but if the savings is large enough people will try.