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Where I live it's 10%. I wouldn't say it's "little". That's on top of like 45% total tax that gets paid before the money reaches me (in the form of payroll tax,
by m0zg 8y ago
Where I live it's 10%. I wouldn't say it's "little". That's on top of like 45% total tax that gets paid before the money reaches me (in the form of payroll tax, social security, medicare, income tax, etc), as well as on top of taxes the retailer pays, and in addition to $10k/yr I pay in real estate tax for my home. At some point you just end up suffocating the economy with this nickel and diming. I'd rather everything was consolidated into a single, predictable rate with no loopholes that I can easily calculate and pay, and all of which every tax payer will see, meaning the whole thing not splitting it into "employer portion" or other bullshit. I would basically like each taxpayer to know exactly how much they are paying, and how all that largesse is being spent. Currently that's not the case in part because the system is deliberately so complicated not even tax accountants can figure it out sometimes.
Not to mention that taxes on consumption are strongly regressive and they disproportionately affect the poor. I certainly don't spend all my money, and that's not the case for the vast majority of people. Add more tax, and they can afford even less.
- davidivadavid 8y agoLike most people in this thread, you assume all consumption taxes need to be flat. That's not the case.
- m0zg 8y agoAnd how do you propose this should be implemented and enforced?
- davidivadavid 8y agoThere's a lot of literature on the topic. Here's an article to get started: https://johnhcochrane.blogspot.com/2016/10/a-first-step-to-progressive-consumption.html https://johnhcochrane.blogspot.com/2016/10/a-first-step-to-p...
- geofft 8y agoIs the proposal to have a flat consumption tax + use some of those revenues as a stipend, so people who consume less have less effective tax? How does that interact with the well-known result (e.g., from the aftermath of the Stanford marshmallow experiment) that people with less savings and less cash flow are legitimately more skeptical of promises of money in the future, even if those promises are assessed as the same present value by well-off economists? In general given the volatile political climate of the US, I'm skeptical that plans of the form "We'll institute a change that disproportionately affects the poor, and we'll solve it with a complicated and not-universally-politically-popular system that will fix things in the steady state" are likely to accomplish their goals. The balance of power in government might change before the steady state. If you create a federal sales tax, which doesn't currently exist, and also increase "handouts" / "entitlements" / "welfare" to address its disproportionate effect on the poor, I expect that the handout will get canceled one year and the sales tax won't.
- m0zg 8y agoAgreed. This is referred to in the field of physics as "spherical cow in a vacuum": an attempt to model a very complex system using an overly simplified and unrealistic model in an effort to "solve" a problem. The resulting model doesn't actually describe the real world, but one can feel good about "solving" the problem, at least until one tries their solution in the complex, real world. https://en.wikipedia.org/wiki/Spherical_cow https://en.wikipedia.org/wiki/Spherical_cow