2 ms·

You would either need to massively cut government services, or massively increase tax rates. Since only savings would be taxed, this would increase spending. In

by graeme 8y ago

You would either need to massively cut government services, or massively increase tax rates. Since only savings would be taxed, this would increase spending. In fact, you could even get the government to pay you money if you ran up extra expenses using debt and incurred a loss. There is a reason no country in the world does OP’s proposal, or yours. They would turn things topsy-turvy.

andrewflnr 8y ago
> Since only savings would be taxed This seems wrong. I would think you would only be able to deduct basics like food and housing, maybe vehicles, with limits. Admittedly, that does get complicated really fast. In fact, as a pastor technically working as a contractor, my dad was able to deduct housing expenses for his whole family. It's not entirely unheard of. Also, I don't believe getting the government to pay you by deliberately incurring a loss works for business, so I don't see why it would for individuals.
- graeme 8y ago
  You can carryforward the loss to future years to avoid taxes. You're right, it's not an instant payment, just a deferral. It would indeed be an enormously complicated system. And for what benefit? (Americans actually have one of the most deduction heavy tax systems in the world btw, including mortgage interest. In Canada we have almost no deductions of expenses from income tax. So our taxes are very simple. Complex taxes favour the rich, and require auditors)