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Somewhat of a tangent but related to labor: tell your reps to abolish personal income taxes and replace it with a consumption tax. We should not be taxing labor

Somewhat of a tangent but related to labor: tell your reps to abolish personal income taxes and replace it with a consumption tax. We should not be taxing labor…

tudelo 5y ago
Every road having a toll is your idea of the future? Or am I misunderstanding something.
- savanaly 5y ago
  I'm pretty positive on this idea. Driving on roads imposes an externality on other people, why shouldn't we attempt to make drivers/companies internalize that cost by charging a toll? I'm not so positive on it that I would support it if it were clunky and imposed a big transaction cost (having to stop and pay). But if it were automatic like the tolling via camera that happens with a certain bridge near me then I would support it. Of course it's probably low in importance compared to certain other modes of travel that have big externalities that aren't tolled/taxed appropriately...(air travel).
- thoughtstheseus 5y ago
  Sorta, I view taxing labor as bad policy. We should not disincentivized labor. But… just saying stop this tax usually has people upset at bigger deficits. So if we tax consumption instead the end result is lower (or no) taxes for income and higher taxes on wealth (indirectly).
- bob1029 5y ago
  Toll roads are a bad example IMO. We could have an entirely separate conversation about how they hurt the most disadvantaged and are typically a gigantic scam when played out on broader timelines. If you want to see the end game on toll road experience, come visit Houston sometime. A consumption tax would be something more like "I want to buy a new hillside estate and I have to pay this special 20% fuck you tax because I'm excessively wealthy". Consumption tax code could be fairly complex in order to minimize impact to those who are purchasing day-to-day items and other essentials. I would happily pay extra taxes on my discretionary purchases like high-end PC hardware (and probably make more of them) if it meant that on the other hand I wouldn't be penalized just for working and making money. Anything you could buy at a grocery store should probably be exempt or in a tightly-controlled tier. Property taxes are cool too. Land is a ~fixed resource, so you have to have some counterpressure involved there. I am not saying alter property taxes to accommodate any of this, I just think they have a place.
- liminvorous 5y ago
  New Zealand funds its roads via taxes on petrol, and for non-petrol vehicles "Road User Charges" which are basically a tax on oddometer kilometers. I haven't checked if how the balance between revenue generated by these taxes compares to spending on roads, etc. though.
- diordiderot 5y ago
  Roads contribute to massive negative externalities. If every road was a toll road you would have more walkable cities. Better public transport options. Less emmisssions. Sounds like a wonderful trade off.
cestith 5y ago
A consumption tax that exempts groceries, non-designer clothes and shoes, school supplies/fees, and household utilities could be much more aligned to helping out the working class than the graduated income tax.
opheliate 5y ago
My thoughts, correct me if I'm wrong here: If I'm on a very low income, likely 100% (or more) of my monthly earnings will go to buying food, paying rent/utilities, etc, so under a consumption tax, a higher proportion of my income will be taxed than under income tax (people in the lowest tax bracket generally won't pay income tax at all). Of course, you could exclude these necessities from tax, but then I find it difficult to see if tax revenue would be high enough from just taxing non-essential items. IMO, any tax system where the poorest people pay a higher proportion of their income than those richer than them is flawed.
- thoughtstheseus 5y ago
  I agree. Wealth taxes seem better but are notoriously difficult to implement. We need more people to have more money… no way to get around that.
- palmtree3000 5y ago
  You can make a consumption tax progressive! You'd probably want to make it a bit more progressive than the current income tax brackets, to cancel out the effect you're describing. Re: implementation: make putting money into a bank account tax deductible and pulling money out taxable, then continue to use the existing income tax system. Any money you earn that you don't spend is a tax write-off, any money you spend that you didn't earn this year is something you have to pay more taxes on.
  - unethical_ban 5y ago
    Why would you want to encourage money to be hoarded? The modern economy is like a shark - if it stops moving, it dies. Exceptions include retirement savings plans, but that is just to keep the government from having to spend more money on old people.
    - imtringued 5y ago
      Funny, I wasted a whole day reading about freicoin and demurrage... i.e. money that is specifically designed to circulate at a roughly constant velocity. I came up with a strange idea that is slightly better. When banks create money via loans bind the lifetime of the deposit to the lifetime of the credit. I.e. individual dollars have expiration dates that are directly tied to monthly payments. If people default then the dollars expire and the bank has to either compensate by raising its interest premium or by lowering interest rates on the deposits to compensate the loss. This means that interest rates would have to be negative sometimes and all debts can be repaid one day. Of course the cash withdrawal scheme is equally complex because cash represents perpetual deposits which would require a perpetual government bond on the other side. Banks would transfer their worst deposits first when you transfer to another bank which would drag all banks to roughly the same level of interest without needing a central bank to set interest rates. The equilibrium interest rate would discover itself automatically, at least that is the hope.

Somewhat of a tangent but related to labor: tell your reps to abolish personal income taxes and replace it with a consumption tax. We should not be taxing labor…

tudelo 5y ago

Every road having a toll is your idea of the future? Or am I misunderstanding something.

savanaly 5y ago
I'm pretty positive on this idea. Driving on roads imposes an externality on other people, why shouldn't we attempt to make drivers/companies internalize that cost by charging a toll? I'm not so positive on it that I would support it if it were clunky and imposed a big transaction cost (having to stop and pay). But if it were automatic like the tolling via camera that happens with a certain bridge near me then I would support it. Of course it's probably low in importance compared to certain other modes of travel that have big externalities that aren't tolled/taxed appropriately...(air travel).
thoughtstheseus 5y ago
Sorta, I view taxing labor as bad policy. We should not disincentivized labor. But… just saying stop this tax usually has people upset at bigger deficits. So if we tax consumption instead the end result is lower (or no) taxes for income and higher taxes on wealth (indirectly).
bob1029 5y ago
Toll roads are a bad example IMO. We could have an entirely separate conversation about how they hurt the most disadvantaged and are typically a gigantic scam when played out on broader timelines. If you want to see the end game on toll road experience, come visit Houston sometime. A consumption tax would be something more like "I want to buy a new hillside estate and I have to pay this special 20% fuck you tax because I'm excessively wealthy". Consumption tax code could be fairly complex in order to minimize impact to those who are purchasing day-to-day items and other essentials. I would happily pay extra taxes on my discretionary purchases like high-end PC hardware (and probably make more of them) if it meant that on the other hand I wouldn't be penalized just for working and making money. Anything you could buy at a grocery store should probably be exempt or in a tightly-controlled tier. Property taxes are cool too. Land is a ~fixed resource, so you have to have some counterpressure involved there. I am not saying alter property taxes to accommodate any of this, I just think they have a place.
liminvorous 5y ago
New Zealand funds its roads via taxes on petrol, and for non-petrol vehicles "Road User Charges" which are basically a tax on oddometer kilometers. I haven't checked if how the balance between revenue generated by these taxes compares to spending on roads, etc. though.
diordiderot 5y ago
Roads contribute to massive negative externalities. If every road was a toll road you would have more walkable cities. Better public transport options. Less emmisssions. Sounds like a wonderful trade off.

cestith 5y ago

A consumption tax that exempts groceries, non-designer clothes and shoes, school supplies/fees, and household utilities could be much more aligned to helping out the working class than the graduated income tax.

opheliate 5y ago

My thoughts, correct me if I'm wrong here: If I'm on a very low income, likely 100% (or more) of my monthly earnings will go to buying food, paying rent/utilities, etc, so under a consumption tax, a higher proportion of my income will be taxed than under income tax (people in the lowest tax bracket generally won't pay income tax at all). Of course, you could exclude these necessities from tax, but then I find it difficult to see if tax revenue would be high enough from just taxing non-essential items. IMO, any tax system where the poorest people pay a higher proportion of their income than those richer than them is flawed.

thoughtstheseus 5y ago
I agree. Wealth taxes seem better but are notoriously difficult to implement. We need more people to have more money… no way to get around that.
palmtree3000 5y ago
You can make a consumption tax progressive! You'd probably want to make it a bit more progressive than the current income tax brackets, to cancel out the effect you're describing. Re: implementation: make putting money into a bank account tax deductible and pulling money out taxable, then continue to use the existing income tax system. Any money you earn that you don't spend is a tax write-off, any money you spend that you didn't earn this year is something you have to pay more taxes on.
- unethical_ban 5y ago
  Why would you want to encourage money to be hoarded? The modern economy is like a shark - if it stops moving, it dies. Exceptions include retirement savings plans, but that is just to keep the government from having to spend more money on old people.
  - imtringued 5y ago
    Funny, I wasted a whole day reading about freicoin and demurrage... i.e. money that is specifically designed to circulate at a roughly constant velocity. I came up with a strange idea that is slightly better. When banks create money via loans bind the lifetime of the deposit to the lifetime of the credit. I.e. individual dollars have expiration dates that are directly tied to monthly payments. If people default then the dollars expire and the bank has to either compensate by raising its interest premium or by lowering interest rates on the deposits to compensate the loss. This means that interest rates would have to be negative sometimes and all debts can be repaid one day. Of course the cash withdrawal scheme is equally complex because cash represents perpetual deposits which would require a perpetual government bond on the other side. Banks would transfer their worst deposits first when you transfer to another bank which would drag all banks to roughly the same level of interest without needing a central bank to set interest rates. The equilibrium interest rate would discover itself automatically, at least that is the hope.