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The net effect of consumer taxes is rich people pay less and poor people pay more. If we need to raise (consumer) taxes, then we may hit that upper limit you m

by itake 6y ago

The net effect of consumer taxes is rich people pay less and poor people pay more. If we need to raise (consumer) taxes, then we may hit that upper limit you mentioned where people can’t afford the basics. Whereas if you tax income, no one will complain if billionaires are charged more.

valenterry 6y ago
> The net effect of consumer taxes is rich people pay less and poor people pay more. As a percentage of their income, yes that's true! > If we need to raise (consumer) taxes, then we may hit that upper limit you mentioned where people can’t afford the basics. I think the solution is not to stop raising consumer taxes, but instead to have a way to make sure people can still afford the basics. And that can very well mean to _also_ tax income and/or wealth. Not to replace consumer taxes, but to enable them. In the end, taxes are more less a 0-sum game in terms of money. So, in my (maybe naive) opinion, it is advantageous to create tax so that people are incentivized to create a better life (for everyone). Think about it: with a high income tax and a low consumption tax, you are essentially giving people who have wealth but don't work an advantage. And there are certainly ways to get wealthy without working, be it inheritance, luck (lottery) or even illegal ways of getting rich without paying tax. Hence I think they opposite way is better, given that it is not at the cost of poor people.
- itake 6y ago
  > As a percentage of their income, yes that's true! And (potentially) straight up dollar value. "Rich" people can afford to purchase items in bulk at a discounted rate. "Rich" people can shop at Sam's club and buy a years supply of toilet paper at once than someone living paycheck to paycheck that buys 1-6 rolls at a time. Other basic costs like laundry. For a poor person, they need to drive/bus/carry their laundry every week to a mat and pay $5/load. A rich person pays the upfront cost once and enjoys discounted in-home laundry for the life of the appliance. If items cost less for rich people, then the tax on those items would be lower as well. > make sure people can still afford the basics One way to make the basics more affordable would be to not tax them. :)
  - valenterry 6y ago
    That is why many countries have different consumption tax on basic goods (like raw food or take-away) and non-basic goods (like food when eating out in a restaurant). I think that is a great, despite the overhead and I don't see a reason why this approach should not be taken over having a high income tax.

by itake 6y ago

valenterry 6y ago

> The net effect of consumer taxes is rich people pay less and poor people pay more. As a percentage of their income, yes that's true! > If we need to raise (consumer) taxes, then we may hit that upper limit you mentioned where people can’t afford the basics. I think the solution is not to stop raising consumer taxes, but instead to have a way to make sure people can still afford the basics. And that can very well mean to _also_ tax income and/or wealth. Not to replace consumer taxes, but to enable them. In the end, taxes are more less a 0-sum game in terms of money. So, in my (maybe naive) opinion, it is advantageous to create tax so that people are incentivized to create a better life (for everyone). Think about it: with a high income tax and a low consumption tax, you are essentially giving people who have wealth but don't work an advantage. And there are certainly ways to get wealthy without working, be it inheritance, luck (lottery) or even illegal ways of getting rich without paying tax. Hence I think they opposite way is better, given that it is not at the cost of poor people.

itake 6y ago
> As a percentage of their income, yes that's true! And (potentially) straight up dollar value. "Rich" people can afford to purchase items in bulk at a discounted rate. "Rich" people can shop at Sam's club and buy a years supply of toilet paper at once than someone living paycheck to paycheck that buys 1-6 rolls at a time. Other basic costs like laundry. For a poor person, they need to drive/bus/carry their laundry every week to a mat and pay $5/load. A rich person pays the upfront cost once and enjoys discounted in-home laundry for the life of the appliance. If items cost less for rich people, then the tax on those items would be lower as well. > make sure people can still afford the basics One way to make the basics more affordable would be to not tax them. :)
- valenterry 6y ago
  That is why many countries have different consumption tax on basic goods (like raw food or take-away) and non-basic goods (like food when eating out in a restaurant). I think that is a great, despite the overhead and I don't see a reason why this approach should not be taken over having a high income tax.