LGC 10.30 — Comprehensive Sales Tax Act — PASSED

[ZMUN M441]

Section 1: The Comprehensive Sales Tax Act
This Act shall be cited as the Comprehensive Sales Tax Act

The tax rates in the following acts will be repealed upon this act taking effect due to becoming obsolete
1. L.C. 6.18: Ishan’s Nicotine Tax Act
2. L10.25.4 Soft Drug Legalization and Taxation Act

Section 2: Sales Tax Rate
1. There shall be a sales tax rate in Lincoln of 6% on any item purchased from a shop or company.

Section 3: Sales Tax Rate for certain products
1. For the following products the sales tax rate in Lincoln will be 21% instead of 6% due to the potential harmful effect of frequent usage
a. tobacco
b. alcohol
c. soft drugs
d. soft drinks
e. all products bought in fast food restaurants

Section 4: Establishing a sales tax cap in line with the federal budget
1. In order to avoid overtaxation or making the budget too overtly complex, the tax rates will be complementary with the federal budget creating a tax cap meaning that
a. if the federal tax rates are higher than the lincoln tax rate, the tax rates of lincoln will not apply and the entire tax income will go to the federal budget
b. if the federal tax rate on a product is lower than the lincoln tax rate, the remaining tax income will go to the Lincoln budget.
c. if there is no federal tax rate on one of the former products, the entire tax revenue will go to the Lincoln budget
d. if a tax federally would be repealed, implemented or adjusted, the tax rate revenue in Lincoln will change accordingly to be adjusted to the changes made on the federal level
e. Lincoln cannot tax a product if the federal tax is higher than outlined in the Lincoln budget due to the tax cap
f. This section only applies to the sales tax and the sales tax on products considered potentially harmful established in this act

Section 5: Effective Date
This legislation shall take effect on 1 January 2023.

Occupying: Slot 7 of 10
Sponsor: Lakigigar

[ZMUN M441]

Motioning for a final vote.

[ZMUN M441]

A final vote on this bill has been initiated.


Nay

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

Aye

[Vice President Christian Man]

Aye

[nerd73]

Nay

[LAKISYLVANIA]

Aye

[ZMUN M441]

LGC 10.30 passes, 3-2

[Former President tack50]

I support this but why are we introducing a sales tax? What do we plan on doing with the extra money?

X tack50

[LAKISYLVANIA]

I support this but why are we introducing a sales tax? What do we plan on doing with the extra money?

X tack50

One of the reasons is to simplify the budget plan given there was a separate cannabis, alcohol and tobacco tax that also didn't make sense, given the tobacco tax was 35% and the alcohol and cannabis ones were 13% (and i don't think encouraging people to use cannabis instead of tobacco as an alternative is a good idea). This is more balanced for these products, and also included the fast food restaurant tax Dwarven Dragon wanted as a compromise. It also technically lowered the tobacco tax, but that was a ridicilous high tax rate.

I didn't want the sales tax to be very high, so this is why it's still lower than most of Europe, given that there is an argument to be made that a high sales tax can hurt the economy. 6% is still on the low side. That can be used to support some welfare acts perhaps in the future (but not during this session). A sales tax can also help against controlling inflation, which would make up for products becoming slightly more expensive (given inflation does the same thing).

6% is a small rate, and it would ensure financial stability for the Lincoln region. There is no federal sales tax and given Lincoln has not have had a sales tax recently, a higher sales tax would not be a good idea i believe.