ABSTRACT
American state and local sales taxes apply to all purchases or sales at a given stage of the economic flow from production to consumption, with the exception of some transactions, like the purchase of prescription medicine, that are explicitly excluded. The federal government levies neither a general sales tax nor any other general consumption tax, like a value-added tax, making it nearly unique among central governments in the industrialized world. Retail sales taxes are generally understood to be uniform taxes on consumer expenditure, save for specific exceptions normally justified on tenents of social or economic policy. The retail sales tax has a theoretical logic as a way to tax consumption expenditure, but some seek to see in it, particularly in the legislative process, other taxes. The retail sales tax represents a particular way of applying a general levy of household consumption expenditure. A fundamental criticism of sales taxes is that they are regressive, violating a normal standard for vertical equity.
