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That's called a consumption tax, which has a lot of intellectual advantages over the current regime. Income = Consumption + Savings. Right now we tax income, b
by idoh 17y ago
That's called a consumption tax, which has a lot of intellectual advantages over the current regime.
Income = Consumption + Savings. Right now we tax income, but it's possible to tax consumption instead. That would encourage more saving and less consumption, which is probably a good thing for the country (but probably won't happen any time soon because in the short run businesses wouldn't stand for it).
- Poiesis 17y agoWould more saving and less consumption be good for the country? I'm not saying it's a bad idea for individuals--it's what we do personally--but it seems like the economy as a whole would stagnate based on my completely unqualified armchair economist opinion.
- rbranson 17y agoYou are correct. Consumption taxes are, in effect, tariffs on commerce. Theoretically, you should try to push these down as much as possible, so that money flows between economic actors with as little burden as possible. A "solution" to the economic burden of income taxes that increases the overhead cost of transactions and encourages hoarding of money is not a solution at all.
- idoh 17y agoThere would be stagnation if the economy is a closed system. But in a world with multiple economies, the ones that channel income into accumulating more income-producing assets will grow their income faster than the ones that don't.