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I love the idea of a no-exceptions flat tax on consumption. However, our GDP per capita is only about 53k. If we need to extract about $6.3k (a number I pulled
by newjersey 11y ago
I love the idea of a no-exceptions flat tax on consumption. However, our GDP per capita is only about 53k. If we need to extract about $6.3k (a number I pulled out of my ass - this is about the current IRS standard deduction and is about $500 per month), we'd need about a 12% tax on every single financial transaction.
I am afraid this 12% tax will drive a lot of our economy underground forcing us to raise rates. How do we prevent that from happening?
https://www.google.com/search?q=us+gdp https://www.google.com/search?q=us+gdp
- AnthonyMouse 11y agoVAT is the usual way. The total tax ends up being 12% (or whatever), but it ends up being a much smaller percentage of the total price at each stage because it's collected throughout the supply chain. And then business customers want to make sure the tax is being collected because they can't deduct the already-paid tax when the item is resold if it wasn't reported by the seller.
- newjersey 11y agoHow does vat work in other countries? Is it one rate across the country? Do provinces and local government get any of this money? Are they banned from imposing an additional sales tax? I'd think you don't want additional sales tax if you have vat but then you'd lose some revenue for local government.
- AnthonyMouse 11y agoThe simplest way to do it would be to add e.g. 8% to the VAT and then give that part to the state where the buyer lives to use for whatever they like. But there is no inherent reason why states couldn't keep their existing sales tax instead. I mean you never want additional any tax, but the money has to come from somewhere.