Capital Journal: SD policy institute figures how sales tax increase will affect different households

“Smolnisky was trying to provide some more context for lawmakers debating the plan, based on an inkling she got months ago about funding an increase in teacher pay using higher sales taxes. “I was sitting next to two teachers and one said, ‘I would like a higher salary, but I don’t want to pay more taxes,’” she said. “So I said, gee, I wonder what a person would end up paying in a sales tax increase.”  She turned to the Washington-based Institute on Taxation and Economic Policy, which has reams of data on each state’s household incomes and other fiscal information and the computer’s ability to sort through them to glean certain answers. Smolnisky’s short report shows the sales tax increase’s effect across seven categories of households in the state based on average incomes, from the lowest 20 percent of them which average $14,000 a year in household income, to the top 1 percent which average $1.35 million in yearly income.”

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