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The concept behind sin taxes was to tax what you don't like more than what you do like. Modern governments apparently hate jobs and earned income the most.
by remline 9y ago
The concept behind sin taxes was to tax what you don't like more than what you do like. Modern governments apparently hate jobs and earned income the most.
- foota 9y agoHow would you rather the govt tax? Seems to be a lot more efficient to tax income rather than to have separate taxes on different kinds of consumption and investment.
- Kluny 9y agoAs it stands, income gets higher tax than capital gains. Capital gains are taxed at half the income tax rate. So people who make most of their money on capital gains are 1) very wealthy 2) paying less tax than poorer people who rely on working for a living 3) incentivized to keep their money in investment vehicles and out of circulation. I'd suggest reversing it and taxing capital gains at the full rate and income tax at half. This is how it's done in Switzerland I believe, if you want a case study. They seem like they're doing okay.
- christocracy 9y agoCap gains are taxed lower because it's already taxed money being invested. In addition, it's a reward for risking your money by investing it into the economy (no, this money is not "out of circulation")
- jameshart 9y agoI've never understood the 'already taxed' argument. Money circulates; governments decide that certain transactions are taxable. The money left over in a given transaction after the tax is paid doesn't magically become exempt from taxation in future transactions, morally, legally or factually. Arguments against inheritance or capital gains taxes on the basis that they tax money that has already been taxed just privilege the idea that taxing earned income is axiomatically legitimate - the one transaction that it's okay to tax. But why is that special? Why not pick sale of goods as the legitimate taxable transaction, then paying tax on wages is paying taxes on money that has already been taxed. Paying someone for their labor is a taxable transaction. Selling an asset at an appreciated value is a taxable transaction. Transferring wealth to descendants after death is a taxable transaction. 'Already taxed' money is not a thing.
- Kluny 9y agoIt just that there's a surplus of capital right now - you can tell by the way bond and savings interest rates are close to zero. The reward for risking your money isn't needed right now. People can't find enough places to leave their money.
- ashark 9y agoThe money in my paycheck has already been taxed a bunch of times by that logic, so my taxes should go down, right?
- golergka 9y agoYour country is not the only one on the globe. You can only tax so much before the thing being taxed starts to move elsewhere. Capital is more mobile than labor.
- Retric 9y agoCapital is often less mobile than labor, homes and salt mines generally don't move. Also there is no reason not to tax foreign investors as shockingly they don't vote and capital is not in short supply.
- humanrebar 9y agoWe're already paying the cost on monitoring, regulating, and taxing different kinds of consumption and investment. Might as well just make those taxes higher as appropriate and decrease/eliminate income taxes.
- foota 9y agoYou'd have to be very careful not to create significantly more regressive taxes.
- humanrebar 9y agoI'm OK with that. If the problem is that life is expensive, solve the problem directly with a minimum income or more generous earned income tax credit.
- stupidhn 9y ago>Seems to be a lot more efficient to tax income rather than to have separate taxes on different kinds of consumption and investment. Consumption taxes are about as efficient as taxes get, especially when you can exempt specific products (and increase taxation on extreme luxuries).