4 ms·

Replacing income tax with a consumption tax would see the super rich pay even less tax as they spend a smaller percentage of their income compared to those with

Replacing income tax with a consumption tax would see the super rich pay even less tax as they spend a smaller percentage of their income compared to those with a lower income. I've heard this argument before, and this is going to sound pedantic, so I apologize, but just exactly how rich can you be if you don't spend your money on things? Or, put a different way, the rich only (bother us/owe more/are easy targets/need to pay up) because a) they don't have to work to live, and b) they buy and own cool stuff we want. Obviously being able to live without working is a goal for everybody, so I'm tossing that out. What I'm left with is that we identify rich people by the stuff they buy or own. Without that, you wouldn't really have rich people -- or if you had them, as far as their participation in society they would be just the same as anybody else. They'd be invisible -- both in their appearance and in their stress on the social fabric. So if you want to sack the rich, do it by taxing the things that we identify with being rich -- buying and owning stuff. That way -- poof! -- there are instantly less rich people in the world, and you've created a stable societal goal for people to strive for which kind of boils down to "make as much money as you need to not work" which is a laudable goal for every society, I would think. Right? Not trying to argue, just thinking out loud. I've spent some time thinking about this, and I think a consumption tax could be supported by folks no matter what their political philosophy or party. The idea is inherently less political than an income tax. Of course, we'll all get hung up on whether it should be progressive or not, but hey -- baby steps.

yummyfajitas 16y ago
The problem is that consumption inequality is not nearly as large as income inequality. If your desire is to soak the rich, you pick the statistic which gives you the broadest base for doing so - consumption is simply not that statistic. In the US, the rich have iPhones while the poor are stuck with iClones [1]. As for why we want to soak the rich, it's clearly not (a) - most poor people work very little (by choice). [1] Note: this is not my opinion on Android (I hate Steve Job's walled garden, and am very happy with my N1), but it is the opinion of several lower class people I know.
philwelch 16y ago
The argument for rich people paying more tax isn't because we don't like them, it's because government is expensive and we can't afford it without rich people subsidizing everyone else. Keep in mind that rich people also have more of a vested interest in maintaining the system, so it's not entirely unfair to them, either.
- yummyfajitas 16y ago
  Rich people have a vested interest in maintaining public goods (roads, police, military), but such goods comprise a minority of the government. Most government spending is simply taking money from some people and giving it to other people. This is explicitly not in the interests of the rich. http://www.usgovernmentspending.com/year2009_US.html http://www.usgovernmentspending.com/year2009_US.html
  - notahacker 16y ago
    Sure, but the 20%[1] of government spending that actually is explicitly in their interests is so fundamental to most rich people's ability to accumulate and enjoy their fortunes. The 80% of the rest of the spending is an acceptable price to pay if you consider it to be explicitly in their interest that the government is not subject to the capricious behaviour of the unaccountable ruler too. Today's government systems weren't designed by the poor. [1]Pareto-inspired made-up-statistic
  - philwelch 16y ago
    Most government spending is simply taking money from some people and giving it to other people. This is explicitly not in the interests of the rich. This is categorically untrue. Social welfare and wealth redistribution, from the perspective of the rich, are a concession to the poorer classes in the interest of pacifying them and preventing a violent leftist uprising. Of course, this has to be done through the government rather than voluntarily because, for game-theoretic reasons, it can't be done voluntarily.
    - yummyfajitas 16y ago

yummyfajitas 16y ago

The problem is that consumption inequality is not nearly as large as income inequality. If your desire is to soak the rich, you pick the statistic which gives you the broadest base for doing so - consumption is simply not that statistic. In the US, the rich have iPhones while the poor are stuck with iClones [1]. As for why we want to soak the rich, it's clearly not (a) - most poor people work very little (by choice). [1] Note: this is not my opinion on Android (I hate Steve Job's walled garden, and am very happy with my N1), but it is the opinion of several lower class people I know.

philwelch 16y ago

The argument for rich people paying more tax isn't because we don't like them, it's because government is expensive and we can't afford it without rich people subsidizing everyone else. Keep in mind that rich people also have more of a vested interest in maintaining the system, so it's not entirely unfair to them, either.

yummyfajitas 16y ago
Rich people have a vested interest in maintaining public goods (roads, police, military), but such goods comprise a minority of the government. Most government spending is simply taking money from some people and giving it to other people. This is explicitly not in the interests of the rich. http://www.usgovernmentspending.com/year2009_US.html http://www.usgovernmentspending.com/year2009_US.html
- notahacker 16y ago
  Sure, but the 20%[1] of government spending that actually is explicitly in their interests is so fundamental to most rich people's ability to accumulate and enjoy their fortunes. The 80% of the rest of the spending is an acceptable price to pay if you consider it to be explicitly in their interest that the government is not subject to the capricious behaviour of the unaccountable ruler too. Today's government systems weren't designed by the poor. [1]Pareto-inspired made-up-statistic
- philwelch 16y ago
  Most government spending is simply taking money from some people and giving it to other people. This is explicitly not in the interests of the rich. This is categorically untrue. Social welfare and wealth redistribution, from the perspective of the rich, are a concession to the poorer classes in the interest of pacifying them and preventing a violent leftist uprising. Of course, this has to be done through the government rather than voluntarily because, for game-theoretic reasons, it can't be done voluntarily.
  - yummyfajitas 16y ago