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> you pay flat €50k in taxes if your car costs more than €50k. That would be the same as capping income tax: you pay a 20% rate up to $100k of taxes, after tha

> you pay flat €50k in taxes if your car costs more than €50k. That would be the same as capping income tax: you pay a 20% rate up to $100k of taxes, after that, no incremental taxes. It's the opposite of progressive, actually taxing rich people less than poor people. I'd even go and propose that cars over €50k should be taxed at a higher marginal tax rate than lower-priced cars.

ansgri 9y ago
Well, to extract welfare funding from rich people you already have income taxes (maybe even progressive), why exactly does one want to encourage a low-quality lifestyle?
- ucaetano 9y ago
  Because expensive cars are luxury goods with negative externalities.
  - khedoros1 9y ago
    Which externalities does an expensive car have that a cheap one doesn't?
    - ucaetano 9y ago
      Larger size, larger engine, more natural resources required (and more pollution). Also, not only you need to account for the negative externalities, but you also need to provide a disincentive for purchase, which then needs to be progressive due to the decreasing marginal personal utility.
      - khedoros1 9y ago
        Those aren't aspects of just luxury cars...and they're aspects that I covered in my previous post. > but you also need to provide a disincentive for purchase You need to pay for the externalities. Beyond that, I disagree that you need to disincentivize the purchase.
ars 9y ago
There's a difference between taxing income and taxing spending. They are opposites, so the tax rate should also be opposite - the higher the spending the lower the tax. After all, you want to encourage wealthy people to spend and spread the wealth, not encourage them to hoard it.
- ucaetano 9y ago
  > you want to encourage wealthy people to spend Not on cars.
  - ars 9y ago
    Why not? In what way is a cheaper car socially better than an expensive car?
    - ucaetano 9y ago
      You don't want cars overall to start with. And as wealth increases, the negative utility of a 1% increase in price of a certain good decreases for that buyer, requiring higher taxes to have the same disincentive than for lower income buyers. Also, cars (especially luxury ones) are highly unproductive assets.
      - ars 9y ago
        > You don't want cars overall to start with. So you punish those who have/want one? Ouch, I wouldn't want to live in your world. Work the other side, make people want to not have one. Making people's life miserable is not a good way to manage your citizens. > And as wealth increases ... lower income buyers. Except that the wealthy person just buys a cheaper car. They still have a car, and you have not accomplished your goal. Your mistake is you taxed spending, without even checking income. Your scheme does not make people not get a car, it causes people to get a cheaper car, that's all.
        ucaetano 9y ago

ansgri 9y ago

Well, to extract welfare funding from rich people you already have income taxes (maybe even progressive), why exactly does one want to encourage a low-quality lifestyle?

ucaetano 9y ago
Because expensive cars are luxury goods with negative externalities.
- khedoros1 9y ago
  Which externalities does an expensive car have that a cheap one doesn't?
  - ucaetano 9y ago
    Larger size, larger engine, more natural resources required (and more pollution). Also, not only you need to account for the negative externalities, but you also need to provide a disincentive for purchase, which then needs to be progressive due to the decreasing marginal personal utility.
    - khedoros1 9y ago
      Those aren't aspects of just luxury cars...and they're aspects that I covered in my previous post. > but you also need to provide a disincentive for purchase You need to pay for the externalities. Beyond that, I disagree that you need to disincentivize the purchase.

ars 9y ago

There's a difference between taxing income and taxing spending. They are opposites, so the tax rate should also be opposite - the higher the spending the lower the tax. After all, you want to encourage wealthy people to spend and spread the wealth, not encourage them to hoard it.

ucaetano 9y ago
> you want to encourage wealthy people to spend Not on cars.
- ars 9y ago
  Why not? In what way is a cheaper car socially better than an expensive car?
  - ucaetano 9y ago
    You don't want cars overall to start with. And as wealth increases, the negative utility of a 1% increase in price of a certain good decreases for that buyer, requiring higher taxes to have the same disincentive than for lower income buyers. Also, cars (especially luxury ones) are highly unproductive assets.
    - ars 9y ago
      > You don't want cars overall to start with. So you punish those who have/want one? Ouch, I wouldn't want to live in your world. Work the other side, make people want to not have one. Making people's life miserable is not a good way to manage your citizens. > And as wealth increases ... lower income buyers. Except that the wealthy person just buys a cheaper car. They still have a car, and you have not accomplished your goal. Your mistake is you taxed spending, without even checking income. Your scheme does not make people not get a car, it causes people to get a cheaper car, that's all.
      - ucaetano 9y ago