Monday, January 3, 2011

Arizona Sales Tax Token

As a New Englander, it cracks me up when Arizonans complain about taxes. Not only are Arizona's taxes low, they're regressive and misplaced. While there is a tax on food and clothing, there is no tax on mining machinery, salon and spa treatments, donations to private schools, and country club memberships. Like any civic minded community, Arizonans realize that it's better to have nearly the lowest per-student-spending in the country than to inconvenience Cadillac driving Snowturds from Michigan.

Stupid as our state taxes might be managed today, impecunious numismatists can find something interesting in the state's tax history. Tax tokens were common in many states in the 1930's when sales taxes really began to come into play across America. My brother, a very knowledgeable coin collector, gave me this on when I went home for Christmas.  Back then state governments looking to raise revenue from sales taxes faced a problem with the currency. 80 years ago you could actually buy things for a few cents. If the sales tax was 3% and something cost only 10 cents, the merchant couldn't give appropriate change. The solution was to charge the purchaser and extra cent and give them change in tax tokens redeemable during future purchases. Each token was worth 10% of 1 cent, or 1/1000 of a dollar. All those fractions of all those pennies added up for the states that used them, but people didn't really like carrying extra coins and doing all that math, so the tax tokens were soon discontinued. They were coins minted at the state level worth less than a penny. They were fairly common and are still easy to find today. Tax tokens even have their own collectors' society, the American Tax Token Society.

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