6 ms·

It's regressive because poor people spend a greater proportion of their income (like, all of it) on retail purchases, so they pay the rate (13% currently) on al

It's regressive because poor people spend a greater proportion of their income (like, all of it) on retail purchases, so they pay the rate (13% currently) on all their income. Where middle and upper class people who sit on money, invest it, whatever pay a much lower effective rate.

Fjolsvith 7y ago
It is called opportunity. Poor people in America are not forced to remain poor. They can (and do) improve their lot in life, and take advantage of being not poor like the other not poor people.
- deleted 7y ago
  [deleted]
- unreal37 7y ago
  I am not going to downvote you, but that's just not always correct. Plenty of people have come from nothing to become billionaires. (Oprah!) But plenty of people are trapped in a situation and can't just remove themselves from those traps. Not everyone can learn Python and make $65 per hour by next week. Let's have empathy for people who really want to do better but can't, and see if we as a society can help them.
  - stallmanite 7y ago
    I think it’s an ugly undercurrent lately where everybody has to be super exceptional/motivated/passionate/etc or they’re worthless and deserve to be discarded by society. Every member of an animal population can’t be exceptional. Are we just doing eugenics rube-goldberg style?
eitland 7y ago
Around here VAT is split so you pay full VAT on general things and services, half VAT on food and no VAT on electrical vehicles (for now I think).
itcrowd 7y ago
I don't understand your point. Even the rich will have to pay 13% once they spend the money.
- danaris 7y ago
  But they won't. Spend it, I mean. At least not on things where VAT is relevant. Most people, when money comes in, they spend it on things, so it immediately has to also pay VAT. If they're lucky, they may have some savings, but it's going to be on the order of 2-3 months' worth of income. Rich people make orders of magnitude more money, and mostly need to spend the same order of magnitude to live as the rest of us. The money beyond that, they mostly don't spend on the same kinds of things. After all, what would you do with a million dollars' worth of soap? There's no VAT on lobbying, on buying a house in the Caymans, on hiring six people to clean the mansion. VAT, like all consumption taxes that aren't highly targeted, is hugely regressive.
  - itcrowd 7y ago
    > But they won't. Spend it, I mean. At least not on things where VAT is relevant. If we can agree that the VAT is levied because the government has added some value to each product sold (value added tax..) then I don't see why spending money on VAT-exempt items makes VAT a bad tax. If you spend it on labor, housing, there are taxes associated with that other than VAT. Lobbying and charities might be tax-deductible or exempt, that is another discussion. I think your point is that regressive taxes are bad, is that a fair analysis? I don't agree with that.
    - danaris 7y ago
      I mean, I believe that regressive taxes are bad. My point, however, is merely that VAT is a regressive tax.
      - itcrowd 7y ago
        I agree it is a regressive tax. Re-reading my comment I can understand that it may seem that I don't agree with that. Sorry about that. However, I fail to see why regressive taxes are bad in general and why VAT is bad in particular. I was originally interested in the question by someone else before me: > I'd be interested to hear your reasoning for why you think sales tax is so bad.

Fjolsvith 7y ago

It is called opportunity. Poor people in America are not forced to remain poor. They can (and do) improve their lot in life, and take advantage of being not poor like the other not poor people.

deleted 7y ago
[deleted]
unreal37 7y ago
I am not going to downvote you, but that's just not always correct. Plenty of people have come from nothing to become billionaires. (Oprah!) But plenty of people are trapped in a situation and can't just remove themselves from those traps. Not everyone can learn Python and make $65 per hour by next week. Let's have empathy for people who really want to do better but can't, and see if we as a society can help them.
- stallmanite 7y ago
  I think it’s an ugly undercurrent lately where everybody has to be super exceptional/motivated/passionate/etc or they’re worthless and deserve to be discarded by society. Every member of an animal population can’t be exceptional. Are we just doing eugenics rube-goldberg style?

eitland 7y ago

Around here VAT is split so you pay full VAT on general things and services, half VAT on food and no VAT on electrical vehicles (for now I think).

itcrowd 7y ago

I don't understand your point. Even the rich will have to pay 13% once they spend the money.

danaris 7y ago
But they won't. Spend it, I mean. At least not on things where VAT is relevant. Most people, when money comes in, they spend it on things, so it immediately has to also pay VAT. If they're lucky, they may have some savings, but it's going to be on the order of 2-3 months' worth of income. Rich people make orders of magnitude more money, and mostly need to spend the same order of magnitude to live as the rest of us. The money beyond that, they mostly don't spend on the same kinds of things. After all, what would you do with a million dollars' worth of soap? There's no VAT on lobbying, on buying a house in the Caymans, on hiring six people to clean the mansion. VAT, like all consumption taxes that aren't highly targeted, is hugely regressive.
- itcrowd 7y ago
  > But they won't. Spend it, I mean. At least not on things where VAT is relevant. If we can agree that the VAT is levied because the government has added some value to each product sold (value added tax..) then I don't see why spending money on VAT-exempt items makes VAT a bad tax. If you spend it on labor, housing, there are taxes associated with that other than VAT. Lobbying and charities might be tax-deductible or exempt, that is another discussion. I think your point is that regressive taxes are bad, is that a fair analysis? I don't agree with that.
  - danaris 7y ago
    I mean, I believe that regressive taxes are bad. My point, however, is merely that VAT is a regressive tax.
    - itcrowd 7y ago
      I agree it is a regressive tax. Re-reading my comment I can understand that it may seem that I don't agree with that. Sorry about that. However, I fail to see why regressive taxes are bad in general and why VAT is bad in particular. I was originally interested in the question by someone else before me: > I'd be interested to hear your reasoning for why you think sales tax is so bad.