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I agree, a vastly simplified tax code is needed. Here's my dream for a simpler tax code: The only tax is a Sales tax/VAT/GST. Pros: - Individuals never have

I agree, a vastly simplified tax code is needed. Here's my dream for a simpler tax code: The only tax is a Sales tax/VAT/GST. Pros: - Individuals never have to think about tax. It would completely eliminate tax returns. That alone is worth it's weight in gold since tax returns are such a time and money burden. - It would close all the loopholes megacorps/wealthy individuals use to pay less tax. You cannot avoid spending money in the place where you operate. - To add to that, if every country implemented this system we would be able to move freely between countries, spending as much time as we desired, without having to worry about tax implications. Obviously that's a much much longer term vision. Cons: - Won't this disproportionately tax the poor? - Firstly, the existing tax code already does. Poor people don't have the time to understand the tax code enough to get everything they can out of their tax return. The also don't have the money to hire an accountant to do it for them. They also don't have the tax avoidance opportunities available to them that come with the scale of being a wealthy individual. - Secondly, many countries already discount or eliminate the ST/VAT/GST on essential items. You could even have a higher tax on luxury goods. You could even have a negative tax (subsidy) on essential items if you desired. The point is it changes the framing of tax discussions to "where does this good/service fall in the scale of essential item to luxury item" which is much much simpler for people to understand. - Won't prices have to rise for the same tax revenue to be collected? - Yes, but now you have all this leftover money that used to just go to income taxes which you can use. Plus prices might not rise as much as you think now that the tax loopholes used by megacorps are closed. Look, I know it's pretty radical, but I think this is the only sensible taxation in the future.

Others 6y ago
I think this is fundamentally a regressive idea. Currently the very poor pay zero (or effectively zero) income taxes. No matter how you structure the sales tax, you cannot go below zero. (I think negative sales tax is not actually realistic, nor particularly progressive.) A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest.
- null0pointer 6y ago
  Could you explain a bit more how negative sales tax is unrealistic? We already subsidize things we want to encourage. > A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest. That is an existing problem inherent to any tax system. It's just saying "Rich people can afford to not spend all of their money". I don't see how that's fundamental to taxing only spending.
  - singron 6y ago
    One problem is that it encourages using items with negative sales tax for other purposes with value lower than the true cost (i.e. it can induce inefficient demand). There are similar issues in agriculture subsidies and price regulation. E.g. High fructose corn syrup is probably as popular as it is because corn has been subsidized and cane sugar has a regulated (high) price. It's kind of like an inefficient arbitrage between physical goods to avoid taxes.
  - pydry 6y ago
    >That is an existing problem inherent to any tax system. It's just saying "Rich people can afford to not spend all of their money". I don't see how that's fundamental to taxing only spending. If you taxed only assets it wouldn't be a problem. Mo money mo taxes. Whether you want to tax predominantly assets or spending usually reflects which side of the capital divide you see yourself identifying with - predominantly a recipient of unearned income (e.g. landlord/FIRE) or a payer (e.g. renter).
  - FabHK 6y ago
    > more how negative sales tax is unrealistic In this proposal, sales tax is the only tax. You can't run a government without money.
  - curryst 6y ago
    > Could you explain a bit more how negative sales tax is unrealistic? We already subsidize things we want to encourage. Lets say apples have a -5% tax rate, and cost $1. Every time I buy an apple from the store, I pay $0.95 (the government pays the rest, which is a problem in and of itself). I can sell that apple for $1, and the government basically just paid me $0.05 for selling an apple. The problem with the government paying that $0.05 is that sales tax is assessed at time of purchase, but the government isn't there to pay their part. The grocery store basically has an IOU from the government. 5% may be higher than the grocery store's margins, which means the customer payment is actually less than the good is worth, so the grocery store's ledger actually goes down for that sale until the government pays back their part. And then you have to deal with fraud. Nobody wants to overreport their sales tax, it costs them money. If you can make money off sales tax, people will filing fraudulent tax reports, and I really don't want the IRS having to track how many apples the grocery store actually sold. I'm sure money launderers would also find a way to use it to buffer their costs. Subsidies probably still have fraud, but it's a smaller number of entities to work with. We can also budget for it because we determine the amount. I can give a budget to the subsidy, but I can't tell people to only buy 10,000 apples next year.
refurb 6y ago
Do we really use that much time and money on tax prep? Sure, it seems like it during this time of year, but for the other 10 months I dont think about it. And just forcing the bureaucracy into the businesses collecting a sales tax doesn’t reduce the burden, it just puts it out of sight for consumers.
cmeacham98 6y ago
> - It would close all the loopholes megacorps/wealthy individuals use to pay less tax. You cannot avoid spending money in the place where you operate. Yeah, it would "fix" this situation by just having them pay _less_ tax without needing a loophole. The percentage of income/wealth that someone spends decreases as wealth increases, so in other words the poor pay proportionally more under your tax scheme.
mjevans 6y ago
A wealth tax. All assets and cash need to be properly valued and then that value taxed. I agree with the sibling comment and also with past discussions where a wealth tax is the only non-regressive (not-keep the poor down) tax code.
- harshalizee 6y ago
  I'm not sure that would work as simply as that. Imagine buying a volatile stock, say, TSLA at $100. This then skyrockets to $1000. You're now taxed on your wealth at that price point. Then it immediately crashes down to $120. All this while, you're just holding the stock but paid taxes on a non existent value.
  - acjohnson55 6y ago
    I haven't thought this through, but could that actually be a feature?
    - xur17 6y ago
      I'm not sure it would - it seems like this would discourage risk taking. Owning stock in a startup would be a terrible move in this case.
      - masklinn 6y ago
        Still sounds like a feature. The unicorn chase for value explosion is not a positive.
      - ajmadesc 6y ago
        _Most_ capital is not put at "risk".
      - acjohnson55 6y ago
        It would certainly discourage risk taking on highly volatile instruments, and I'm not so sure that's a net contributor to the economy.
xyzelement 6y ago
> Won't this disproportionately tax the poor? - Firstly, the existing tax code already does. I used to think this because it's often said, but learned it's not true. This sums it up: The top 50 percent of all taxpayers paid 97 percent of all individual income taxes, while the bottom 50 percent paid the remaining 3 percent. The top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent). The top 1 percent of taxpayers paid a 26.8 percent average individual income tax rate, which is more than six times higher than taxpayers in the bottom 50 percent (4.0 percent). https://taxfoundation.org/summary-of-the-latest-federal-income-tax-data-2020-update/ https://taxfoundation.org/summary-of-the-latest-federal-inco...
- cmeacham98 6y ago
  How do any of those statistics refute that statement without supplementary data on income/wealth (or whatever else you're using to measure the proportionality of tax)?
  - deleted 6y ago
    [deleted]
  - xyzelement 6y ago
    I don't understand your question about proportionality of tax, because there are two ways to think about proportionality and the stats I cite cover both. Take another look at the last point I cite, I THINK it goes to what you're asking: the richest 1% paid 26.8% of they income in taxes. The poorest 50% paid only 4% of their income in taxes. Let me know if your question is something different.
    - cmeacham98 6y ago
      Sorry, I must have completely blanked and missed that statement. Regardless, it is compared to AGI, which is possibly one of the worst possible metrics to use. Firstly, AGI is post-deductions, so people who play games with their taxes show up as paying more. Secondarily, and more importantly, income is a trash metric anyways. Poor does not mean low income, it means low wealth. In your data somebody who inherits a ton of money but has 0 income counts as "bottom 50%". Rich people have a disproportionally lower income vs wealth.
monkeywork 6y ago
It also creates a problem where you have countries who are close together people crossing the border to shop where taxes are cheaper and then the country where they live not getting those tax dollars (example Canada USA)
singron 6y ago
Income tax itself isn't the complicated part of taxes. I encourage everyone to do their own taxes by hand sometime. There are like 4 boxes for wage income and income tax, and 100s of boxes for everything else. And besides the boxes you do fill out, there is all the reading and calculating required to figure out you don't have to fill in even more boxes (e.g. in order to know if you have to fill in the AMT form, you potentially have to do all the AMT calculations). I think the biggest single thing that would simplify the tax code is removing the separate capital gains tax and just counting it all as income. There is significant complexity in the tax return to calculate everything independently and to show that your capital gains aren't really income. You could eliminate Schedule D, Form 8949 (which you have to up to 4 times), and the Capital Gains/Schedule D worksheets to figure income. HSAs are also super painful. E.g. CA doesn't respect the tax-exempt status of HSAs, so you have to add the HSA back into your income so they can tax it. There are also a lot of bookkeeping requirements for relatively low amounts of money. In practice, they aren't very useful since the fees are high, the returns are low, and their function is redundant with insurance (i.e. paying premiums now to cover large future expenses). In general, there are a ton of random little exemptions and extra taxes that you might qualify for and it just takes time to figure out if they apply to you. E.g. Form 8959 (Additional Medicare Tax) is a 0.9% tax for income over a certain amount. They should have just adjusted the income tax graduations in an equivalent way. Form 8960 (Net Investment Income Tax) has a similar problem. CA gives a $60 renter's credit if you make under certain amounts, which is just too insignificant to matter (e.g. 0.3% of $1500/month annualized).
- KirillPanov 6y ago
  > biggest single thing that would simplify the tax code is removing the separate capital gains tax and just counting it all as income That's okay during times like ~1990-2020, a time of wonderfully low dollar inflation. The justification behind the long-term capital gains rate is this: during times of high dollar inflation, taxation on capital asset values turns into an outright tax on investment. If the dollar is inflating rapidly then an investment which simply maintains its value in real terms -- neither gaining nor losing real value -- will see its value in dollars increase and will therefore be taxed, heavily. The lower rate for capital gains tax was in recognition that not all of that gain in nominal value was real income. All of the major reductions in the long-term capital gains rate (i.e. reduction of the rate, shortening of timespan for "long term", and increase/removal of cap) occurred after highly dollar-inflationary periods (1934, 1942, 1978-1981). Without a lower capital gains rate, during times of high dollar inflation the wealthy will shift all their money into non-fungible assets (real estate, artwork, patents, Persian rugs, domain names, antiques) which aren't fungible commodities with liquid markets and therefore can't be marked-to-market or taxed until sold. This kind of economy-wide, sudden, and simultaneous disinvestment would be a catastrophe for the economy. Not to mention the resulting real estate boom would make the homelessness problem an order of magnitude worse in a matter of months. When your money is losing value every day, buying up every apartment in sight, jacking the rent to the moon, and evicting the tenants (so it can sit empty and maintain value without any management effort) is, unfortunately, a great strategy. Note that the 1990's were a boom time for the US (Cold War peace dividend), and from ~2000-2020 we had a massive onlining of cheap Chinese labor providing a deflationary counterpressure to our outrageous money-printing escapades. All the cheap Chinese labor is now fully online and "Fed go Brrr" is in permanent COVID-hyperdrive, so the party will end real soon now.
KirillPanov 6y ago
Please enjoy your imminent crucifixion at the hands of the wokesters. It's what they do to people who use logic like that.
alexchamberlain 6y ago
You can eliminate tax returns for most people by getting their employer to do it for them, which is effectively how the UK PAYE system works. Only those paid more than 100k, the self employed or others who want to claim certain tax incentives have to file what's known as a self assessment.
- hahajk 6y ago
  In the US our employers also submit our taxes to the govt. But because they don’t have enough information about our lives (mortgage payments, donations, savings incentives) they send the wrong amount. In April we “file our tax return” and pay/have returned the difference.
  - alexchamberlain 6y ago
    Interesting. Mortgage payments wouldn't attract tax relief in the UK, and everything else has a nil rate band, so only those with large savings have to declare. Charity donations are dealt with through a scheme called Gift Aid - essentially, the charity claims the tax back.
Uke 6y ago
another con is: It's very hard to figure out how high your personal tax rate is if you don't track all your spending. I guess it's less of a problem for you guys over the pond, but at least in countries like Japan and Germany where at least 60-80% of all payments are done with cash it's near impossible to know unless you track your spending by hand. I agree with you that VAT would be cool to have as the sole tax, though.
- masklinn 6y ago
  > I agree with you that VAT would be cool to have as the sole tax, though. I’m sure it’s cool if you’re worth a few millions or above. VATs are highly regressive taxes, though they are also consumption disincentives (essentially luxury taxes on a number of non-luxury, which is why essentials like food tend to be low-rated).
- ganafagol 6y ago
  Why would you need or want to derive that number?
csomar 6y ago
The reason that Taxes are complicated, is that the government wants them to be complicated. You can do without taxes (the government prints money, which is a tax on economic activity); or at a maximum print money + tax on big wealth accumulation which shouldn't affect the average guy. The tax code is being used as a tool to funnel money through industries and as kickbacks to bureaucrats. A non-communist government can't force the population to do something (invest in this, build this, do that), but they can encourage/discourage it through taxes. The tax code is not getting simpler any sooner.
- concordDance 6y ago
  Why would people keep using dollars if they were being inflated away and they didn't have to pay taxes?
Taniwha 6y ago
Here in NZ we have a GST plus income tax - there are 3 tax steps, there are NO exemptions. Most people don't need to file a tax return, if you have only 1 job your employer will pay exactly the correct PAYE. If you have multiple jobs (or if you want to anyway) you can file online, it's 2-3 pages. If you don't do anything the IRD will run your taxes and if necessary send you a bill, or a refund (with interest). I run a small business, I do my monthly PAYE in a simple spreads sheet - one line, type in the gross income out comes the numbers to include in the online filing web page including PAYE, and 401K equivalent. Doing the same in California was a nightmare. We have no need for TurboTax or it's equivalent
cies 6y ago
> Here's my dream [...] The only tax is a Sales tax/VAT/GST. Ok, I'll share mine: the only tax is on pollution and/or scare resource usage. It's weird that we tax anything that's considered "good" in my opinion. Taxing housing, income from labour, consumption -- who came up with these shit ideas? Tax only, ONLY, what is considered bad (or should be reduced to a minimum), mainly: pollution. And the market will organize itself accordingly; optimize for all of us to survive a little longer on this planet (instead of exploiting it ASAP).
- nextaccountic 6y ago
  Fully agreed! We need to tax the hell out of such externalities. Perhaps the main tax of the whole humanity should be a carbon tax, at least in the 21th century.
- FabHK 6y ago
  Both together would be good. Tax externalities (=carbon tax etc.), and tax consumption (=VAT).
FabHK 6y ago
So, this is basically a tax on consumption. Not a bad idea per se, but regressive, as many pointed out. However, in conjunction with a UBI it might make sense, and be progressive.

Others 6y ago

I think this is fundamentally a regressive idea. Currently the very poor pay zero (or effectively zero) income taxes. No matter how you structure the sales tax, you cannot go below zero. (I think negative sales tax is not actually realistic, nor particularly progressive.) A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest.

null0pointer 6y ago
Could you explain a bit more how negative sales tax is unrealistic? We already subsidize things we want to encourage. > A system that only taxes spending fundamentally has problems in that the richer people can afford to save and invest. That is an existing problem inherent to any tax system. It's just saying "Rich people can afford to not spend all of their money". I don't see how that's fundamental to taxing only spending.
- singron 6y ago
  One problem is that it encourages using items with negative sales tax for other purposes with value lower than the true cost (i.e. it can induce inefficient demand). There are similar issues in agriculture subsidies and price regulation. E.g. High fructose corn syrup is probably as popular as it is because corn has been subsidized and cane sugar has a regulated (high) price. It's kind of like an inefficient arbitrage between physical goods to avoid taxes.
- pydry 6y ago
  >That is an existing problem inherent to any tax system. It's just saying "Rich people can afford to not spend all of their money". I don't see how that's fundamental to taxing only spending. If you taxed only assets it wouldn't be a problem. Mo money mo taxes. Whether you want to tax predominantly assets or spending usually reflects which side of the capital divide you see yourself identifying with - predominantly a recipient of unearned income (e.g. landlord/FIRE) or a payer (e.g. renter).
- FabHK 6y ago
  > more how negative sales tax is unrealistic In this proposal, sales tax is the only tax. You can't run a government without money.
- curryst 6y ago
  > Could you explain a bit more how negative sales tax is unrealistic? We already subsidize things we want to encourage. Lets say apples have a -5% tax rate, and cost $1. Every time I buy an apple from the store, I pay $0.95 (the government pays the rest, which is a problem in and of itself). I can sell that apple for $1, and the government basically just paid me $0.05 for selling an apple. The problem with the government paying that $0.05 is that sales tax is assessed at time of purchase, but the government isn't there to pay their part. The grocery store basically has an IOU from the government. 5% may be higher than the grocery store's margins, which means the customer payment is actually less than the good is worth, so the grocery store's ledger actually goes down for that sale until the government pays back their part. And then you have to deal with fraud. Nobody wants to overreport their sales tax, it costs them money. If you can make money off sales tax, people will filing fraudulent tax reports, and I really don't want the IRS having to track how many apples the grocery store actually sold. I'm sure money launderers would also find a way to use it to buffer their costs. Subsidies probably still have fraud, but it's a smaller number of entities to work with. We can also budget for it because we determine the amount. I can give a budget to the subsidy, but I can't tell people to only buy 10,000 apples next year.

refurb 6y ago

Do we really use that much time and money on tax prep? Sure, it seems like it during this time of year, but for the other 10 months I dont think about it. And just forcing the bureaucracy into the businesses collecting a sales tax doesn’t reduce the burden, it just puts it out of sight for consumers.

cmeacham98 6y ago

> - It would close all the loopholes megacorps/wealthy individuals use to pay less tax. You cannot avoid spending money in the place where you operate. Yeah, it would "fix" this situation by just having them pay _less_ tax without needing a loophole. The percentage of income/wealth that someone spends decreases as wealth increases, so in other words the poor pay proportionally more under your tax scheme.

mjevans 6y ago

A wealth tax. All assets and cash need to be properly valued and then that value taxed. I agree with the sibling comment and also with past discussions where a wealth tax is the only non-regressive (not-keep the poor down) tax code.

harshalizee 6y ago
I'm not sure that would work as simply as that. Imagine buying a volatile stock, say, TSLA at $100. This then skyrockets to $1000. You're now taxed on your wealth at that price point. Then it immediately crashes down to $120. All this while, you're just holding the stock but paid taxes on a non existent value.
- acjohnson55 6y ago
  I haven't thought this through, but could that actually be a feature?
  - xur17 6y ago
    I'm not sure it would - it seems like this would discourage risk taking. Owning stock in a startup would be a terrible move in this case.
    - masklinn 6y ago
      Still sounds like a feature. The unicorn chase for value explosion is not a positive.
    - ajmadesc 6y ago
      _Most_ capital is not put at "risk".
    - acjohnson55 6y ago
      It would certainly discourage risk taking on highly volatile instruments, and I'm not so sure that's a net contributor to the economy.

xyzelement 6y ago

> Won't this disproportionately tax the poor? - Firstly, the existing tax code already does. I used to think this because it's often said, but learned it's not true. This sums it up: The top 50 percent of all taxpayers paid 97 percent of all individual income taxes, while the bottom 50 percent paid the remaining 3 percent. The top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent). The top 1 percent of taxpayers paid a 26.8 percent average individual income tax rate, which is more than six times higher than taxpayers in the bottom 50 percent (4.0 percent). https://taxfoundation.org/summary-of-the-latest-federal-income-tax-data-2020-update/ https://taxfoundation.org/summary-of-the-latest-federal-inco...

cmeacham98 6y ago
How do any of those statistics refute that statement without supplementary data on income/wealth (or whatever else you're using to measure the proportionality of tax)?
- deleted 6y ago
  [deleted]
- xyzelement 6y ago
  I don't understand your question about proportionality of tax, because there are two ways to think about proportionality and the stats I cite cover both. Take another look at the last point I cite, I THINK it goes to what you're asking: the richest 1% paid 26.8% of they income in taxes. The poorest 50% paid only 4% of their income in taxes. Let me know if your question is something different.
  - cmeacham98 6y ago
    Sorry, I must have completely blanked and missed that statement. Regardless, it is compared to AGI, which is possibly one of the worst possible metrics to use. Firstly, AGI is post-deductions, so people who play games with their taxes show up as paying more. Secondarily, and more importantly, income is a trash metric anyways. Poor does not mean low income, it means low wealth. In your data somebody who inherits a ton of money but has 0 income counts as "bottom 50%". Rich people have a disproportionally lower income vs wealth.

monkeywork 6y ago

It also creates a problem where you have countries who are close together people crossing the border to shop where taxes are cheaper and then the country where they live not getting those tax dollars (example Canada USA)

singron 6y ago

Income tax itself isn't the complicated part of taxes. I encourage everyone to do their own taxes by hand sometime. There are like 4 boxes for wage income and income tax, and 100s of boxes for everything else. And besides the boxes you do fill out, there is all the reading and calculating required to figure out you don't have to fill in even more boxes (e.g. in order to know if you have to fill in the AMT form, you potentially have to do all the AMT calculations). I think the biggest single thing that would simplify the tax code is removing the separate capital gains tax and just counting it all as income. There is significant complexity in the tax return to calculate everything independently and to show that your capital gains aren't really income. You could eliminate Schedule D, Form 8949 (which you have to up to 4 times), and the Capital Gains/Schedule D worksheets to figure income. HSAs are also super painful. E.g. CA doesn't respect the tax-exempt status of HSAs, so you have to add the HSA back into your income so they can tax it. There are also a lot of bookkeeping requirements for relatively low amounts of money. In practice, they aren't very useful since the fees are high, the returns are low, and their function is redundant with insurance (i.e. paying premiums now to cover large future expenses). In general, there are a ton of random little exemptions and extra taxes that you might qualify for and it just takes time to figure out if they apply to you. E.g. Form 8959 (Additional Medicare Tax) is a 0.9% tax for income over a certain amount. They should have just adjusted the income tax graduations in an equivalent way. Form 8960 (Net Investment Income Tax) has a similar problem. CA gives a $60 renter's credit if you make under certain amounts, which is just too insignificant to matter (e.g. 0.3% of $1500/month annualized).

KirillPanov 6y ago
> biggest single thing that would simplify the tax code is removing the separate capital gains tax and just counting it all as income That's okay during times like ~1990-2020, a time of wonderfully low dollar inflation. The justification behind the long-term capital gains rate is this: during times of high dollar inflation, taxation on capital asset values turns into an outright tax on investment. If the dollar is inflating rapidly then an investment which simply maintains its value in real terms -- neither gaining nor losing real value -- will see its value in dollars increase and will therefore be taxed, heavily. The lower rate for capital gains tax was in recognition that not all of that gain in nominal value was real income. All of the major reductions in the long-term capital gains rate (i.e. reduction of the rate, shortening of timespan for "long term", and increase/removal of cap) occurred after highly dollar-inflationary periods (1934, 1942, 1978-1981). Without a lower capital gains rate, during times of high dollar inflation the wealthy will shift all their money into non-fungible assets (real estate, artwork, patents, Persian rugs, domain names, antiques) which aren't fungible commodities with liquid markets and therefore can't be marked-to-market or taxed until sold. This kind of economy-wide, sudden, and simultaneous disinvestment would be a catastrophe for the economy. Not to mention the resulting real estate boom would make the homelessness problem an order of magnitude worse in a matter of months. When your money is losing value every day, buying up every apartment in sight, jacking the rent to the moon, and evicting the tenants (so it can sit empty and maintain value without any management effort) is, unfortunately, a great strategy. Note that the 1990's were a boom time for the US (Cold War peace dividend), and from ~2000-2020 we had a massive onlining of cheap Chinese labor providing a deflationary counterpressure to our outrageous money-printing escapades. All the cheap Chinese labor is now fully online and "Fed go Brrr" is in permanent COVID-hyperdrive, so the party will end real soon now.

KirillPanov 6y ago

Please enjoy your imminent crucifixion at the hands of the wokesters. It's what they do to people who use logic like that.

alexchamberlain 6y ago

You can eliminate tax returns for most people by getting their employer to do it for them, which is effectively how the UK PAYE system works. Only those paid more than 100k, the self employed or others who want to claim certain tax incentives have to file what's known as a self assessment.

hahajk 6y ago
In the US our employers also submit our taxes to the govt. But because they don’t have enough information about our lives (mortgage payments, donations, savings incentives) they send the wrong amount. In April we “file our tax return” and pay/have returned the difference.
- alexchamberlain 6y ago
  Interesting. Mortgage payments wouldn't attract tax relief in the UK, and everything else has a nil rate band, so only those with large savings have to declare. Charity donations are dealt with through a scheme called Gift Aid - essentially, the charity claims the tax back.

Uke 6y ago

another con is: It's very hard to figure out how high your personal tax rate is if you don't track all your spending. I guess it's less of a problem for you guys over the pond, but at least in countries like Japan and Germany where at least 60-80% of all payments are done with cash it's near impossible to know unless you track your spending by hand. I agree with you that VAT would be cool to have as the sole tax, though.

masklinn 6y ago
> I agree with you that VAT would be cool to have as the sole tax, though. I’m sure it’s cool if you’re worth a few millions or above. VATs are highly regressive taxes, though they are also consumption disincentives (essentially luxury taxes on a number of non-luxury, which is why essentials like food tend to be low-rated).
ganafagol 6y ago
Why would you need or want to derive that number?

csomar 6y ago

The reason that Taxes are complicated, is that the government wants them to be complicated. You can do without taxes (the government prints money, which is a tax on economic activity); or at a maximum print money + tax on big wealth accumulation which shouldn't affect the average guy. The tax code is being used as a tool to funnel money through industries and as kickbacks to bureaucrats. A non-communist government can't force the population to do something (invest in this, build this, do that), but they can encourage/discourage it through taxes. The tax code is not getting simpler any sooner.

concordDance 6y ago
Why would people keep using dollars if they were being inflated away and they didn't have to pay taxes?

Taniwha 6y ago

Here in NZ we have a GST plus income tax - there are 3 tax steps, there are NO exemptions. Most people don't need to file a tax return, if you have only 1 job your employer will pay exactly the correct PAYE. If you have multiple jobs (or if you want to anyway) you can file online, it's 2-3 pages. If you don't do anything the IRD will run your taxes and if necessary send you a bill, or a refund (with interest). I run a small business, I do my monthly PAYE in a simple spreads sheet - one line, type in the gross income out comes the numbers to include in the online filing web page including PAYE, and 401K equivalent. Doing the same in California was a nightmare. We have no need for TurboTax or it's equivalent

cies 6y ago

> Here's my dream [...] The only tax is a Sales tax/VAT/GST. Ok, I'll share mine: the only tax is on pollution and/or scare resource usage. It's weird that we tax anything that's considered "good" in my opinion. Taxing housing, income from labour, consumption -- who came up with these shit ideas? Tax only, ONLY, what is considered bad (or should be reduced to a minimum), mainly: pollution. And the market will organize itself accordingly; optimize for all of us to survive a little longer on this planet (instead of exploiting it ASAP).

nextaccountic 6y ago
Fully agreed! We need to tax the hell out of such externalities. Perhaps the main tax of the whole humanity should be a carbon tax, at least in the 21th century.
FabHK 6y ago
Both together would be good. Tax externalities (=carbon tax etc.), and tax consumption (=VAT).

FabHK 6y ago

So, this is basically a tax on consumption. Not a bad idea per se, but regressive, as many pointed out. However, in conjunction with a UBI it might make sense, and be progressive.