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It is, but every now and then when I remember that overall tax that I pay is >50% of my gross income it does feel like theft. I'm not a finance expert, but why

It is, but every now and then when I remember that overall tax that I pay is >50% of my gross income it does feel like theft. I'm not a finance expert, but why can't there be just one tax for everything like VAT? If I buy a coffee for 1 euro I pay 20 cents VAT, if a billionaire buys a yacht for 100 mil he pays 20 mil VAT. To me that seems fair. I'm just thinking out loud here, but it seems that there are so many taxes and different stages instead of one, just so most of people wouldn't realize of how much tax they are actually paying.

me_me_me 7y ago
Because rich people have can afford people that will help them avoid paying taxes. >if a billionaire buys a yacht for 100 mil he pays 20 mil VAT. Or he will have some legal agreement with yacht owner in tax haven, to 'rent' a yacht for $1. Paying 20c tax on 100mil 'purchase'. Hey I didn't say that taxation was perfect :) it clearly isn't, especially nowdays when it seems that middle income class needs to carry burden of whole the country while top earners laugh all the way to their panama bank.
ineedasername 7y ago
It would be more expensive for you to hire your own private police force, fire department, sanitation and water treatment plant, and countless other services.
- AnthonyMouse 7y ago
  It actually wouldn't, by a rather large amount, if it meant you could also opt out of the other government services you don't want and which comprise the large majority of the government budget. "We need fire departments and they would cost 30% more if only 70% of people carried fire insurance" is fine until you spend 50,000% of that amount on War in Iraq and buying votes of retirees / drug companies with unsustainably large benefits increases.
  - ineedasername 7y ago
    I don't see the math adding up there, how the average person could have their own mini police and fire force, or any of the countless pieces of infrastructure that we all use. Taking out the portion of our taxes that goes to things we might not want doesn't even begin to cover this. Most of this stuff is available and works at all because everyone pays a little bit and economies of scale kick in to make it less than if each person rolled their own solution.
    - AnthonyMouse 7y ago
      You don't have your own personal fire department, you and thousands of other people who live in your city each pay for fire insurance and the insurance industry then limits their claims by operating a fire company. It's basically the same as what the government does except that you have the option to not pay and then subsequently not have anybody to complain to if your house burns down. And the fire company may show up to put out your house fire anyway (to keep it from spreading) even if you don't have an insurance policy, but then you have a house which is half burnt by fire and half flooded by firefighters and you don't have any insurance, which continues to be a strong incentive to buy fire insurance to begin with and thereby fund the local fire company. In the end you end up in the same place for the services that are actually worth having (like fire departments), because they're worth having so the majority of people buy into them and you still get economies of scale, but you get the option to decline other wasteful services that cost more than they're worth. And that puts useful pressure on individual services to be worth more than they cost.
      - ineedasername 7y ago
        If you're talking about a bunch of people paying into a fund to cover the cost, then all you've done is reinvent taxes. The only difference is who you pay them to, and that people on the lowest end of the income spectrum can't afford coverage even if they wanted it.
        AnthonyMouse 7y ago
deleted 7y ago
[deleted]
bluecalm 7y ago
There could be and they should be. There are better (more just, more enforceable, less hostile to businesses) and worse taxes (basically unenforceable easy to game ones which only honest people fully pay). The problem is that increasing taxes in exchange of getting rid of bad ones is way more politically difficult than just introducing new ones or very slightly increasing existing ones. For example land value tax is widely considered a very good tax: it's just (the more valuable land you have the more you need the government), it's easy to enforce (hard to hide the land), it doesn't hinder business (you pay it no matter what you decide to build there), it discourages hoarding on valuable resource. Still, if you try to increase it enough to get rid of some very bad taxes you still get an uproar an be voted out even if the change is revenue neutral. That's because you will hurt one entranched group a lot and everyone else will benefit on average less (at least at the beginning).

me_me_me 7y ago

Because rich people have can afford people that will help them avoid paying taxes. >if a billionaire buys a yacht for 100 mil he pays 20 mil VAT. Or he will have some legal agreement with yacht owner in tax haven, to 'rent' a yacht for $1. Paying 20c tax on 100mil 'purchase'. Hey I didn't say that taxation was perfect :) it clearly isn't, especially nowdays when it seems that middle income class needs to carry burden of whole the country while top earners laugh all the way to their panama bank.

ineedasername 7y ago

It would be more expensive for you to hire your own private police force, fire department, sanitation and water treatment plant, and countless other services.

AnthonyMouse 7y ago
It actually wouldn't, by a rather large amount, if it meant you could also opt out of the other government services you don't want and which comprise the large majority of the government budget. "We need fire departments and they would cost 30% more if only 70% of people carried fire insurance" is fine until you spend 50,000% of that amount on War in Iraq and buying votes of retirees / drug companies with unsustainably large benefits increases.
- ineedasername 7y ago
  I don't see the math adding up there, how the average person could have their own mini police and fire force, or any of the countless pieces of infrastructure that we all use. Taking out the portion of our taxes that goes to things we might not want doesn't even begin to cover this. Most of this stuff is available and works at all because everyone pays a little bit and economies of scale kick in to make it less than if each person rolled their own solution.
  - AnthonyMouse 7y ago
    You don't have your own personal fire department, you and thousands of other people who live in your city each pay for fire insurance and the insurance industry then limits their claims by operating a fire company. It's basically the same as what the government does except that you have the option to not pay and then subsequently not have anybody to complain to if your house burns down. And the fire company may show up to put out your house fire anyway (to keep it from spreading) even if you don't have an insurance policy, but then you have a house which is half burnt by fire and half flooded by firefighters and you don't have any insurance, which continues to be a strong incentive to buy fire insurance to begin with and thereby fund the local fire company. In the end you end up in the same place for the services that are actually worth having (like fire departments), because they're worth having so the majority of people buy into them and you still get economies of scale, but you get the option to decline other wasteful services that cost more than they're worth. And that puts useful pressure on individual services to be worth more than they cost.
    - ineedasername 7y ago
      If you're talking about a bunch of people paying into a fund to cover the cost, then all you've done is reinvent taxes. The only difference is who you pay them to, and that people on the lowest end of the income spectrum can't afford coverage even if they wanted it.
      - AnthonyMouse 7y ago

deleted 7y ago

[deleted]

bluecalm 7y ago

There could be and they should be. There are better (more just, more enforceable, less hostile to businesses) and worse taxes (basically unenforceable easy to game ones which only honest people fully pay). The problem is that increasing taxes in exchange of getting rid of bad ones is way more politically difficult than just introducing new ones or very slightly increasing existing ones. For example land value tax is widely considered a very good tax: it's just (the more valuable land you have the more you need the government), it's easy to enforce (hard to hide the land), it doesn't hinder business (you pay it no matter what you decide to build there), it discourages hoarding on valuable resource. Still, if you try to increase it enough to get rid of some very bad taxes you still get an uproar an be voted out even if the change is revenue neutral. That's because you will hurt one entranched group a lot and everyone else will benefit on average less (at least at the beginning).