Consumer Rebate Escrow Tax Accounts – Growing local businesses, creating local jobs, and lowering local taxes from local shopping

If consumers can shop around for deals on goods, why not let them shop around for tax deals?

Many retailers have what might be called Rebate Escrow Accounts (CREAs).   A percentage of the purchase price of goods is credited to the purchaser into what is practically an “escrow” account.  When sufficient value has accumulated in the account, the retailer rebates the patron cash credit towards more merchandise.

With retailers devising all manner of incentive programs, it would be a tremendous boost to the local economy if rebates were tax credits that local consumers could apply towards paying property taxes, motor vehicle taxes, or any tax or fee of choice that is paid to the government. Specifically, this would be a Consumer Rebate Escrow Tax Account (CRETA).

The weekly spending required, with a given purchase price rebate percentage,  to pay the annual motor vehicle registration  taxes and property taxes is shown in the graphs below.


Motor Vehicle Registration Tax Example

Vehicle market value: $20,000

Effective tax rate: 2.5%

Annual registration tax: $625

Annual registration tax/5o weeks: $12.50/week

Percentage rebate to pay tax: 20%

Weekly spending required to pay tax w/rebates:$62.50/week


Property Tax Example

Property value: $100,000

Effective tax rate: 1%

Annual property tax: $1000

Annual property tax/50 weeks: $20/week

Percentage rebate to pay tax: 20%

Weekly spending required to pay tax w/rebates: $100/week

CRETA’s would incentivize people to boost their local economy because they would have to shop locally to gain the local tax reduction.  And, many people would find it appealing to be able to literally shop around for the best tax deal.

For example, you go to lunch and find that two restaurants are offering “Taxpayer Specials.”  One restaurant offers a 10% ($1) rebate for $10 meal that is credited to your CRETA.  The other restaurant offers a 20% ($2) rebate for a $10 meal that is credited to you CRETA.  In either case, you pay the same $10 for lunch.  The difference is that with the second restaurant, your tax burden get rebated $1 lower because you shopped around for a better tax deal.

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