6 ms·

I'm hardly an accountant, CFA or politician, but the simplest thing is to define a taxation system (our progressive one is sufficient) and simply tax all every

I'm hardly an accountant, CFA or politician, but the simplest thing is to define a taxation system (our progressive one is sufficient) and simply tax all every dollar that ultimately goes to a person at that rate. Finally, eliminate all deductions. That should resolve most of the problems. The problems begin when we start saying certain things are virtuous - oh buying a home is a good thing, let's incentive that and allow people to deduct. Donating to charity is good - deduction! Investing in something in the long term is good - lower tax rate! Environment is good! Energy credit. Enough. Who exactly benefits from all of these deductions? You guessed it! Regardless of how you feel about the actual deductions, if you want to eliminate "tax evasion" (I use quotes because it's not even a bad thing, it's perfectly legal) - that's the only way.

Cthulhu_ 6y ago
> and simply tax all every dollar that ultimately goes to a person at that rate. Finally, eliminate all deductions. Well there's your first problem; little money actually goes to a person. Bezos is listed as the richest person in the world, but the vast majority of his wealth is in the company. It reminds me when the Google head honchos humblebragged about only having a wage of $1 a year. Basically admitting they were dodging income taxes.
- endisneigh 6y ago
  That's not a problem - when the stock is liquidated he would be taxed, no - the problem is that he's taxed differently and there are mechanisms in which that tax he pays is deducted, e.g. donating much of it to an organization he controls.
  - machinebun 6y ago
    Yes, but he can live on a cheap loan collateralized by his stocks and never sell - that way he pays no tax)
    - Dracophoenix 6y ago
      Any asset can be collateralized. Every homeowner in US can do the same thing with a reverse mortgage. Leveraging assets isn't tax evasion. It doesn't even qualify as avoidance.
MagnumOpus 6y ago
It's not that straight forward. First because ultra-high earners can and do move abroad to avoid or evade income taxation. So if you kill sales tax/VAT, corporate tax and other taxes, suddenly it is very attractive for people earning millions per year to move their tax residence to Monaco (or indeed London, for "non-dom" taxpayers), where they don't pay income taxes. Second because there is need for some "fairness" and equivalence between treating employment income and treating small entrepreneurs who do the same. Whether keeping the total percentage of corporate income tax+dividend tax to a similar level as personal income tax, or allowing similar deductions on mortgages for a personal "buy-to-let" rental as for an incorporated rental company, in order to avoid perverse incentives. And while I agree that mortgage interest deductions are an economically counterproductive and regressive policy, that is besides the point if the point is not tax policy but tax dodging...

Cthulhu_ 6y ago

> and simply tax all every dollar that ultimately goes to a person at that rate. Finally, eliminate all deductions. Well there's your first problem; little money actually goes to a person. Bezos is listed as the richest person in the world, but the vast majority of his wealth is in the company. It reminds me when the Google head honchos humblebragged about only having a wage of $1 a year. Basically admitting they were dodging income taxes.

endisneigh 6y ago
That's not a problem - when the stock is liquidated he would be taxed, no - the problem is that he's taxed differently and there are mechanisms in which that tax he pays is deducted, e.g. donating much of it to an organization he controls.
- machinebun 6y ago
  Yes, but he can live on a cheap loan collateralized by his stocks and never sell - that way he pays no tax)
  - Dracophoenix 6y ago
    Any asset can be collateralized. Every homeowner in US can do the same thing with a reverse mortgage. Leveraging assets isn't tax evasion. It doesn't even qualify as avoidance.

MagnumOpus 6y ago

It's not that straight forward. First because ultra-high earners can and do move abroad to avoid or evade income taxation. So if you kill sales tax/VAT, corporate tax and other taxes, suddenly it is very attractive for people earning millions per year to move their tax residence to Monaco (or indeed London, for "non-dom" taxpayers), where they don't pay income taxes. Second because there is need for some "fairness" and equivalence between treating employment income and treating small entrepreneurs who do the same. Whether keeping the total percentage of corporate income tax+dividend tax to a similar level as personal income tax, or allowing similar deductions on mortgages for a personal "buy-to-let" rental as for an incorporated rental company, in order to avoid perverse incentives. And while I agree that mortgage interest deductions are an economically counterproductive and regressive policy, that is besides the point if the point is not tax policy but tax dodging...