4 ms·
> Why not finance helping quadriplegics from increased VAT? Because VAT, beside being a very effective tax (it's the biggest source of income of most countries
by byroot 11y ago
> Why not finance helping quadriplegics from increased VAT?
Because VAT, beside being a very effective tax (it's the biggest source of income of most countries), is the most unfair one.
Say a country have a 20% VAT
Low income household need to use the entirety of their income to survive (food, housing, etc). So effectively 20% of their income is collected as VAT.
Now a upper class household, let's say they save 25% of their income each month as retirement plans etc, and spend the rest.
They've been effectively taxed at 20% of 75% of they income, so their effective VAT rate was 15%.
While you often see very high income people advocate for flat rate tax instead of progressive tax, none of them have the nerve to propose a reversed progressive tax like VAT is, where poor people pay proportionally more than rich people.
- saiya-jin 11y agothere is no enforceable way this would work. everybody would just pay some homeless/unemployed to buy him that expensive cool little thing, and give him 10 USD for the job. try to prevent that :) at the end, poor people would become less poor, but only by screwing with system, and only very few of them. you can put some limits on who can buy what, but this will inevitably create a massive bureaucratic overhead, meaning another set of useless government jobs that create no added value, but draw cash steadily from treasury.
- forrestthewoods 11y agoThe best possible tax scheme for poor people would be a simple flat tax that is impossible for rich people to avoid. I've always felt your definition of "most unfair" to be a great fallacy. Yes poor people pay a higher percentage of their income. They also receive more in benefits than they give and the flat tax ensures the rich pay their share. The more complicated you make the system the more it will benefit the rich. VAT is a net benefit for the poor. Making the whole system work that way, particularly in the face of globalization, is the best course of action. To declare it unfair is to cut off your nose to spite your face. In my opinion.
- Frondo 11y agoThe best possible tax scheme for poor people would be a wealth tax. Make it a flat wealth tax, and I'm with you: 10% (or whatever) of what you possess, into the community coffers every year. Don't muck around with income, it's too easy to game.
- bluecalm 11y agoWealth tax is obviously (I think!) the best kind of tax but the problem with it is it's hard to collect (you would need to assess wealth of everyone and that is a problem).
- forrestthewoods 11y agoSo if I start my own company I have to give away 10% of that company every year? Because I own shares in my company. And those shares have value. Which contribute to my wealth. That seems terrible! I don't see how a wealth tax is a good idea at all. If you could recommend a good article that argues why it's good and how it would work I'd love to read it.
- asuffield 11y agoPlease consider what kind of behaviour you would encourage. If wealth erodes every year then this strongly disincentives long term thinking and rewards business ventures which give quick cash and then burn out, like strip mining, and punishes planning for the future like pensions. You want your tax system to reward long term thinking, not punish it.
- bluecalm 11y agoI don't understand why it would encourage what you are predicting. If you "quickly cash out and burn" then you pay a tax on it as well. My argument for wealth tax is that people with most wealth are the ones with the strongest interest to keep the country stable and nice place to live in.
- oberstein 11y ago
- guard-of-terra 11y agoVAT is already being collected, and Apple contributed to it enormously by creating new markets (like tablets). That increase can be used to help quadriplegics.
- bluecalm 11y agoYou can mitigate that effect by some kind of basic income or return of paid VAT (you collect receipts or something and get the money back up to certain amount or 100% up to certain amount, 50% up to another step etc.). You can make VAT progressive this way.
- oldmanjay 11y agoTreating everyone the same blindly is the very essence of fair. It is, however, unjust by your sense of justice. There's a vast difference between the concepts.
- czr80 11y agoYou're also assuming a specific sense of justice - you're assuming that the utility of money is linear. (That is, giving up $10 is the same to someone earning minimum wage and to someone earning $150k). You can hold that view - but recognize that it is a specific view, not an essential definition of fairness.