4 ms·

There'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.h

There'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 ago
Is 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 ago
  Agreed. 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

geofft 8y ago

Is 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 ago
Agreed. 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