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So, the generic answer for why we favor income or value-added taxes over revenue taxes is that (1) we want to encourage investment, so marginal business expense
by hawkice 11y ago
So, the generic answer for why we favor income or value-added taxes over revenue taxes is that (1) we want to encourage investment, so marginal business expenses are essentially tax-free, and (2) revenue taxes limit the ability for competitive middlemen (who can lower transaction costs) and give massive advantage to vertically integrated semi-monopolies.
- lukasm 11y agoSure, but maybe the benefits outweigh costs. Revenue tax reduces accounting costs, simplifies models, it's better for small startups etc.