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Only if the government continues to insist on taxing income as a main source of income. The government could easily implement a sales tax and crypto would only

Only if the government continues to insist on taxing income as a main source of income. The government could easily implement a sales tax and crypto would only be a small obstacle to enforcement. And as a bonus feature we could fire a bunch of bureaucrats too.

ajackfox 5y ago
Sales taxes are regressive and affect the poorest the most. Income taxes (can be) progressive. Progressive taxation benefits society at large.
- roenxi 5y ago
  > Progressive taxation benefits society at large... ... claim the poor and the people who make their money off capital gains. Who gets to decide what "good for society" means in context of taxation is possibly the most political question out there. It is not at all obvious that making the most productive people pay most of the burden gets to the best outcome.
  - dnautics 5y ago
    the more people's lives you are affecting in a positive sense the more likely it is you are making a very high income. the opposite arrow is not necessarily true, but one wonders if there isn't a 'baby with the bathwater' effect with progressive taxation.
    - tluyben2 5y ago
      As OSS dev this very often not true for instance: there is a lot of OSS having a positive effect on a huge amount of people and yet the authors scraping by. Paying for OSS should be a tax write off aka charity. Would stimulate more people to just open source it all.
      - dnautics 5y ago
        You assume that the value in this case is created merely by its existence but software in a vacuum is worthless. The value in software is also created by orgs that choose to use the software, by distribution networks. It must be reduced to practice. As a software dev that can be a hard pill to swallow.
        tluyben2 5y ago
        Yes, agreed. But does that change the case?
        dnautics 5y ago
        Yes? I am asserting that you are overestimating the value of the programmer, which is one axis of the correlation I suggest.
  - unethical_ban 5y ago
    Being highly paid or at the top of a management structure does not equal being more productive. It is one philosophy that there exists some line, some fuzzy DMZ that gets crossed between being merely "wealthy and more prosperous than others" and obscene. Colloquially that seems to be "billionaire" but I bet a lot of people on the farther-left would define is somewhere north of $10 million. Especially in a country so far behind the rest of the developed world with regards to access to health-care and housing for so many millions of people.
    - roenxi 5y ago
      Billionaires don't generally pay progressive income taxes. They're part of the 'money off capital gains' crowd.
- NickM 5y ago
  Sales taxes can be done in a progressive way if you calculate total purchases for the year as (reported income minus reported money added to savings). Though, of course, you then need even more reporting than we already have, but it would have the upside of no longer disincentivizing work like the current system does, and rewarding savings over spending too.
  - NickM 5y ago
    Not sure why I got downvoted; while it's not super well-known, this is a real and potentially feasible idea that has been studied by economists and has had papers written about it. You can absolutely apply tax brackets to sales tax to avoid making it a regressive tax, it's just a little bit more administratively complex.
    - gamblor956 5y ago
      There are a number of reasons for your downvotes. For starters, income taxes don't disincentive work and are in fact lower now than they were during our greatest periods of economic growth. And from the perspective of someone who actually works in tax: the "FairTax" simply pushes all the complexity to everyday transactions, instead of minimizing it to periodic transactions occurring 1-2 times a month (with reporting once a year). It would hugely disincentive paying for actual things, and artificially incentivize (untaxed) services over (heavily taxed) goods. Moreover, the "FairTax" rate would be 30% or more on all purchases. Not only would the FairTax would obscenely regressive in effect, but a tax rate that large would push a substantial portion of the economy underground! There's so much wrong with "FairTax" that it should be called "Ridiculous Tax."
      - dragonwriter 5y ago
        > income taxes don't disincentive work While I agree with much of your post, current taxes on income (featuring reduced taxes on capital income, exclusion of most income from gifts/inheritances, and supplemental taxes on labor income [“payroll tax”]) absolutely disincentivize working for income if you have choices of how to get income. Now, lots of people don't have choices and are stuck with work, but that doesn't mean there is no disincentive effect. (Of course, “treat income as income” makes this much fairer than the status quo, much less the laughably misnamed “FairTax”.)
- mrfusion 5y ago
  I figure you can make them progressive by taxing luxury items and not necessities. Obviously there’s a ton of gray area but it could still help a lot.
- nightski 5y ago
  This is alleviated with a probate and has been studied in depth ala the FairTax. It's FUD and is holding us back. Not to mention there are many efficiencies that come with this system which would likely cause prices to even out over time near their current levels or just slightly higher.
adrianN 5y ago
I don't think this would be a good idea for fairness reasons, but assuming you'd implement it this way: How would you collect sales tax if you allow completely anonymous transactions? This is already a problem with cash, it would become a bigger problem if you introduce more convenient alternatives to cash in the form of crypto.
- NickM 5y ago
  It could be done anonymously if you calculate purchases implicitly as income minus savings. This would de-anonymize savings of course, but they’re not really that anonymous right now anyway since most methods of savings have to report interest/dividends/etc.
  - wizzwizz4 5y ago
    And then you're back to where you started, surely? You still need the information about income.
    - NickM 5y ago
      Right, but the problem cited earlier up in the thread is that sales tax would prevent anonymous purchases; if you accept that income is not anonymous (which it already isn't), then you can still have a system with both sales tax and anonymous purchases.
  - pjc50 5y ago
    Income: unknown due to financial privacy Savings: unknown (held in cryptocurrency, private) Tax: divide by zero error Besides, doesn't the US already have sales taxes? Or are they state-only? I'm starting to favor a tax on real estate and/or land value, since that's physically impossible to hide.
    - handrous 5y ago
      > Besides, doesn't the US already have sales taxes? Or are they state-only? State. City. County. Sub-divisions of same that are special sales tax districts and have extra sales tax applied. Not every instance of those entities applies a sales tax, but any could and many do. Basically everything except federal. The sales tax where I am, in a "red" state, is about 11% (we actually have a really high effective all-inclusive tax rate in this state, for how entirely shitty government services and infrastructure are) > I'm starting to favor a tax on real estate and/or land value, since that's physically impossible to hide. The challenge with that is the system for assigning value—everything else about it is easy. We already have something close to what you'd need in the US because real estate property taxes are common. That system's not perfect but it may still be good-enough, despite its flaws. It seems to work kinda OK. That might change if that became a more important revenue source, and for more levels of government, though.

ajackfox 5y ago

Sales taxes are regressive and affect the poorest the most. Income taxes (can be) progressive. Progressive taxation benefits society at large.

roenxi 5y ago
> Progressive taxation benefits society at large... ... claim the poor and the people who make their money off capital gains. Who gets to decide what "good for society" means in context of taxation is possibly the most political question out there. It is not at all obvious that making the most productive people pay most of the burden gets to the best outcome.
- dnautics 5y ago
  the more people's lives you are affecting in a positive sense the more likely it is you are making a very high income. the opposite arrow is not necessarily true, but one wonders if there isn't a 'baby with the bathwater' effect with progressive taxation.
  - tluyben2 5y ago
    As OSS dev this very often not true for instance: there is a lot of OSS having a positive effect on a huge amount of people and yet the authors scraping by. Paying for OSS should be a tax write off aka charity. Would stimulate more people to just open source it all.
    - dnautics 5y ago
      You assume that the value in this case is created merely by its existence but software in a vacuum is worthless. The value in software is also created by orgs that choose to use the software, by distribution networks. It must be reduced to practice. As a software dev that can be a hard pill to swallow.
      - tluyben2 5y ago
        Yes, agreed. But does that change the case?
        dnautics 5y ago
        Yes? I am asserting that you are overestimating the value of the programmer, which is one axis of the correlation I suggest.
- unethical_ban 5y ago
  Being highly paid or at the top of a management structure does not equal being more productive. It is one philosophy that there exists some line, some fuzzy DMZ that gets crossed between being merely "wealthy and more prosperous than others" and obscene. Colloquially that seems to be "billionaire" but I bet a lot of people on the farther-left would define is somewhere north of $10 million. Especially in a country so far behind the rest of the developed world with regards to access to health-care and housing for so many millions of people.
  - roenxi 5y ago
    Billionaires don't generally pay progressive income taxes. They're part of the 'money off capital gains' crowd.
NickM 5y ago
Sales taxes can be done in a progressive way if you calculate total purchases for the year as (reported income minus reported money added to savings). Though, of course, you then need even more reporting than we already have, but it would have the upside of no longer disincentivizing work like the current system does, and rewarding savings over spending too.
- NickM 5y ago
  Not sure why I got downvoted; while it's not super well-known, this is a real and potentially feasible idea that has been studied by economists and has had papers written about it. You can absolutely apply tax brackets to sales tax to avoid making it a regressive tax, it's just a little bit more administratively complex.
  - gamblor956 5y ago
    There are a number of reasons for your downvotes. For starters, income taxes don't disincentive work and are in fact lower now than they were during our greatest periods of economic growth. And from the perspective of someone who actually works in tax: the "FairTax" simply pushes all the complexity to everyday transactions, instead of minimizing it to periodic transactions occurring 1-2 times a month (with reporting once a year). It would hugely disincentive paying for actual things, and artificially incentivize (untaxed) services over (heavily taxed) goods. Moreover, the "FairTax" rate would be 30% or more on all purchases. Not only would the FairTax would obscenely regressive in effect, but a tax rate that large would push a substantial portion of the economy underground! There's so much wrong with "FairTax" that it should be called "Ridiculous Tax."
    - dragonwriter 5y ago
      > income taxes don't disincentive work While I agree with much of your post, current taxes on income (featuring reduced taxes on capital income, exclusion of most income from gifts/inheritances, and supplemental taxes on labor income [“payroll tax”]) absolutely disincentivize working for income if you have choices of how to get income. Now, lots of people don't have choices and are stuck with work, but that doesn't mean there is no disincentive effect. (Of course, “treat income as income” makes this much fairer than the status quo, much less the laughably misnamed “FairTax”.)
mrfusion 5y ago
I figure you can make them progressive by taxing luxury items and not necessities. Obviously there’s a ton of gray area but it could still help a lot.
nightski 5y ago
This is alleviated with a probate and has been studied in depth ala the FairTax. It's FUD and is holding us back. Not to mention there are many efficiencies that come with this system which would likely cause prices to even out over time near their current levels or just slightly higher.

adrianN 5y ago

I don't think this would be a good idea for fairness reasons, but assuming you'd implement it this way: How would you collect sales tax if you allow completely anonymous transactions? This is already a problem with cash, it would become a bigger problem if you introduce more convenient alternatives to cash in the form of crypto.

NickM 5y ago
It could be done anonymously if you calculate purchases implicitly as income minus savings. This would de-anonymize savings of course, but they’re not really that anonymous right now anyway since most methods of savings have to report interest/dividends/etc.
- wizzwizz4 5y ago
  And then you're back to where you started, surely? You still need the information about income.
  - NickM 5y ago
    Right, but the problem cited earlier up in the thread is that sales tax would prevent anonymous purchases; if you accept that income is not anonymous (which it already isn't), then you can still have a system with both sales tax and anonymous purchases.
- pjc50 5y ago
  Income: unknown due to financial privacy Savings: unknown (held in cryptocurrency, private) Tax: divide by zero error Besides, doesn't the US already have sales taxes? Or are they state-only? I'm starting to favor a tax on real estate and/or land value, since that's physically impossible to hide.
  - handrous 5y ago
    > Besides, doesn't the US already have sales taxes? Or are they state-only? State. City. County. Sub-divisions of same that are special sales tax districts and have extra sales tax applied. Not every instance of those entities applies a sales tax, but any could and many do. Basically everything except federal. The sales tax where I am, in a "red" state, is about 11% (we actually have a really high effective all-inclusive tax rate in this state, for how entirely shitty government services and infrastructure are) > I'm starting to favor a tax on real estate and/or land value, since that's physically impossible to hide. The challenge with that is the system for assigning value—everything else about it is easy. We already have something close to what you'd need in the US because real estate property taxes are common. That system's not perfect but it may still be good-enough, despite its flaws. It seems to work kinda OK. That might change if that became a more important revenue source, and for more levels of government, though.