4 ms·

It doesn't have to be an either/or thing though. The big advantage of VAT is that they are much simpler (cheaper) to administer and greatly reduce tax evasion.

by matrix 16y ago

It doesn't have to be an either/or thing though. The big advantage of VAT is that they are much simpler (cheaper) to administer and greatly reduce tax evasion. So, having a VAT combined with a reform of income taxes could make a lot of sense. A VAT alone would be far too regressive but combined with a sensible income tax (and credits) to counter-balance the regressive effects could be a big improvement over the system today. I don't think I've seen anyone propose having a VAT replace income tax.

tptacek 16y ago
If you stop taxing investments and corporate income, you've "greatly reduced tax evasion" by eliminating the most-evaded taxes. The taxes that are the hardest to evade (sales tax, payroll taxes) are the ones that disproportionately impact the lower middle class. "Ease of enforcement" is an irrational standard for designing tax systems. If you want to lay off the rich in the hopes that they'll create jobs, just say that.
- sokoloff 16y ago
  When creating a tax system one should not take into account the likelihood of actually collecting the tax?
  - tptacek 16y ago
    The way you worded that question creates a subtle and significant difference in meaning from the idea I was talking about, and therefore doesn't address my comment.
    - sokoloff 16y ago
      "Ease of enforcement" is an irrational standard for designing tax systems. was the part I was addressing. While I agree that I've re-stated it, I don't feel that I've mis-characterized it, or if I've done so, it wasn't intentional/strawman-ish/troll-ish. While I'm not suggesting that likelihood of collection should be the prime design criterion, I would have to rank it fairly highly, both for practical reasons (the money must be collected) as well as perceived fairness reasons (it would be ideal if people felt that everyone was paying their own share, rather than seeing material underpayment of tax, or believing that it exists, either of which creates incentives for that person to also cheat)
      - tptacek 16y ago
        "Likelihood of collection" and "ease of enforcement" are so dissimilar that I'm convinced you and I aren't on the same wavelength. It's ok. We don't have to be.

by matrix 16y ago

tptacek 16y ago

If you stop taxing investments and corporate income, you've "greatly reduced tax evasion" by eliminating the most-evaded taxes. The taxes that are the hardest to evade (sales tax, payroll taxes) are the ones that disproportionately impact the lower middle class. "Ease of enforcement" is an irrational standard for designing tax systems. If you want to lay off the rich in the hopes that they'll create jobs, just say that.

sokoloff 16y ago
When creating a tax system one should not take into account the likelihood of actually collecting the tax?
- tptacek 16y ago
  The way you worded that question creates a subtle and significant difference in meaning from the idea I was talking about, and therefore doesn't address my comment.
  - sokoloff 16y ago
    "Ease of enforcement" is an irrational standard for designing tax systems. was the part I was addressing. While I agree that I've re-stated it, I don't feel that I've mis-characterized it, or if I've done so, it wasn't intentional/strawman-ish/troll-ish. While I'm not suggesting that likelihood of collection should be the prime design criterion, I would have to rank it fairly highly, both for practical reasons (the money must be collected) as well as perceived fairness reasons (it would be ideal if people felt that everyone was paying their own share, rather than seeing material underpayment of tax, or believing that it exists, either of which creates incentives for that person to also cheat)
    - tptacek 16y ago
      "Likelihood of collection" and "ease of enforcement" are so dissimilar that I'm convinced you and I aren't on the same wavelength. It's ok. We don't have to be.