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Increasing the tax rate isn't what matters; the structure needs reform. For example getting rid of income tax and replacing it with revenue taxes, which are mor
by akvadrako 6y ago
Increasing the tax rate isn't what matters; the structure needs reform. For example getting rid of income tax and replacing it with revenue taxes, which are more difficult to circumvent.
- kibibyte 6y agoI'm not sure if revenue taxes are the better idea: they will impact low-margin businesses (e.g. restaurants) hard.
- raverbashing 6y agoThis is actually doable, though you need specific classifications for each business You can set a fee of 3% for restaurants let's say, and 10% for some other business (example) This makes sense for small business
- bryanrasmussen 6y agoAmazon restaurant chain starting up, it's amazing how much of Amazon's money needs to be moved into that subsidiary.
- sokoloff 6y agoGet a free iPhone with purchase of our $999 steak dinner.
- akvadrako 6y agoI would assume they would raise prices so margins stay similar, though I don't know if that's been experimented with. Even if it does mean less restaurants and less eating out, there is nothing inherently more unfair about it.
- Aunche 6y agoThat just benefits vertical integration. Amazon would pay less taxes in Amazon basics than third party goods. What you really want is a VAT. You're only taxed on the value add of your product. It's widely regarded as the most efficient tax and the US is one of the only countries that doesn't use it.
- akvadrako 6y agoI agree there are some issues with a revenue tax, but VAT isn't good enough because you really want to capture B2B transactions. You can also see for example the digital services tax introduced by France because VAT was not proving effective.
- deleted 6y ago[deleted]
- hollerith 6y agoSales tax is essentially a tax on corporate revenue.
- Thev00d00 6y agoIt does not capture any B2B revenue?
- makomk 6y agoIntentionally so, because taxing B2B revenue is effectively a financial penalty for not being a huge vertically-integrated megacorp. It means that any goods which have more than one company involved in their production are taxed at a higher rate than ones where every step is done in-house. This is not generally a desirable tax incentive.
- kelnos 6y agoIs it? In the US, at least, sales tax is taken on top of listed prices (it's uncommon for an establishment to list "tax included" prices), so essentially a customer is paying for the product and then paying the government on top of it. Unless your thought is that businesses would charge more if there was no sales tax. I don't really buy that, though; businesses list pre-tax prices specifically to avoid sticker shock.