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I think replacing income tax with a progressive consumption tax is something worth considering (or at least modeling out). Currently the bottom half of W2 earne

I think replacing income tax with a progressive consumption tax is something worth considering (or at least modeling out). Currently the bottom half of W2 earners in the US don't pay any income tax and the wealthiest only pay capital gains. It doesn't seem fair that the upper middle income earners carry so much if the tax burden (at least as a percentage of their wealth). We also need to get away from the idea of taxation "as punishment" and think about it in terms of "what does funding the system actually require".

seunosewa 5y ago
No one type of tax is the best. The key to effective taxation is to have many different kinds of tax so that there's no way for the rich to avoid paying any taxes at all by reorganizing their financial affairs. So if you avoid one kind of tax, then you'll have to pay more of a different kind of tax. So a progressive consumption tax is perhaps a great addition to income tax, not a substitute.
- throwaway0a5e 5y ago
  > The key to effective taxation is to have many different kinds of tax so that there's no way for the rich to avoid paying any taxes at all by reorganizing their financial affairs. Or just tax less to increase the wealth floor where avoiding it becomes useful thereby decreasing the number of people who do it thereby reducing the losses. You're basically reducing amplitude of the tax curve in order to capture a wider range. The billionaires may be stupid rich but there's so few of them they make up a negligible percent of public coffers. Nobody bothers registering their car out of state to save a $50 fee. Nobody bothers putting their house in a trust to save a couple thousand in taxes. Not hard to extrapolate from there.
- someguydave 5y ago
  are you interested in minimizing economic distortion or punishing rich people?
  - seunosewa 5y ago
    I'm for government having a consistent, reliable revenue stream. For a given amount of tax revenue many smalln types of tax should be better than a few big ones. Economic distortion as a result of taxation is primarily due to tax avoidance activities by those who can afford to (large corporations and the rich), so a system that makes it not worth the effort should minimize economic distortion, too.

seunosewa 5y ago

No one type of tax is the best. The key to effective taxation is to have many different kinds of tax so that there's no way for the rich to avoid paying any taxes at all by reorganizing their financial affairs. So if you avoid one kind of tax, then you'll have to pay more of a different kind of tax. So a progressive consumption tax is perhaps a great addition to income tax, not a substitute.

throwaway0a5e 5y ago
> The key to effective taxation is to have many different kinds of tax so that there's no way for the rich to avoid paying any taxes at all by reorganizing their financial affairs. Or just tax less to increase the wealth floor where avoiding it becomes useful thereby decreasing the number of people who do it thereby reducing the losses. You're basically reducing amplitude of the tax curve in order to capture a wider range. The billionaires may be stupid rich but there's so few of them they make up a negligible percent of public coffers. Nobody bothers registering their car out of state to save a $50 fee. Nobody bothers putting their house in a trust to save a couple thousand in taxes. Not hard to extrapolate from there.
someguydave 5y ago
are you interested in minimizing economic distortion or punishing rich people?
- seunosewa 5y ago
  I'm for government having a consistent, reliable revenue stream. For a given amount of tax revenue many smalln types of tax should be better than a few big ones. Economic distortion as a result of taxation is primarily due to tax avoidance activities by those who can afford to (large corporations and the rich), so a system that makes it not worth the effort should minimize economic distortion, too.