6 ms·

Maybe part of solution is higher sales taxes , and less (or zero) other taxes. Ie tax mainly (only?) at the purchase of a good or service. I don’t recall see

by bobbob1921 5y ago

Maybe part of solution is higher sales taxes , and less (or zero) other taxes. Ie tax mainly (only?) at the purchase of a good or service. I don’t recall seeing massive sales tax fraud scandals, atlease at any meaning scale.

whakim 5y ago
Sales taxes are logistically simple but also highly regressive, so the wealthy wouldn't even have to use loopholes to enjoy an ultra-regressive tax system :).
- tekknik 5y ago
  Why is the point to tax the wealthy more? Why do we want to kill the incentive for starting companies and becoming wealthy? My opinion, the left will only be happy with a 100% income tax and socialism.
  - whakim 5y ago
    > Why is the point to tax the wealthy more? Why do we want to kill the incentive for starting companies and becoming wealthy? There isn't any evidence that tax rates much higher than those we currently have have been any obstacle to growth. Perhaps in theory, but many countries around the world and across history (including the United States!) have had much more progressive taxation regimes and it hasn't "kill[ed] the incentive for starting companies and becoming wealthy."
    - tekknik 5y ago
      > Perhaps in theory, but many countries around the world and across history (including the United States!) have had much more progressive taxation regimes and it hasn't "kill[ed] the incentive for starting companies and becoming wealthy." Which countries? And what happens when another country becomes more competitive than the US from a tax perspective? Will it destroy the country? certainly not. Will the US continue to be the world reserve currency and lead the world? Again, no.
      - whakim 5y ago
        The United States had very high income taxes from 1950 until 1980 (and also grew very fast during that period - much faster than in the period 1980-present). It is also worth noting that the United States was actually the leading advocate of very progressive income taxes during that period - convincing many other countries to adopt extremely high top tax rates on the wealthy. Today, most developed countries have higher top tax rates (and more progressive tax regimes) than the United States does - Germany, France, Sweden, Japan, etc. etc. > And what happens when another country becomes more competitive than the US from a tax perspective? This is a really important point and I'm glad you brought it up. The progressive taxation regime has been undermined over the past 30-40 years by the "Washington consensus" - the idea that free flows of goods and capital are paramount and that it should be US policy (as well as the policy of the IMF, World Bank, etc.) to pursue such ends via trade agreements and in exchange for loans. The issue is that free flows of capital leads to the exact problem you describe: a global race to the bottom on tax rates and a general nihilism about the possibility of an equitable tax regime. The long term challenge, then, is about building transnational agreements that are about more than just free flows of goods and capital: they must address issues of taxation as well.
  - maxlybbert 5y ago
    The argument (with sales taxes) isn’t usually that they don’t let you soak the rich but that they’re too hard on the poor. Almost by definition, somebody living paycheck-to-paycheck is spending all their income. So their sales tax bill is going to be basically whatever the sales tax rate is applied to their income (e.g., a 7% sales tax rate applied to all of their income). Somebody who saves some of their income isn’t spending that portion, so in a year their sales tax bill will be smaller than the sales tax rate (e.g., if they save 10% of their income, then they’re only paying sales tax on the 90% that they spent). You could say this isn’t hard enough of the rich, or it’s too hard on the poor. Usually “too hard on the poor” is an easier argument to make. There are solutions, such as exempting food or other necessities (the poor probably spend a bigger portion of their income on food, so exempting food helps them more), or adding a luxury tax on things that the poor don’t buy, etc. Of course, then there’s an effort to define what should count as a necessity or what should count as a luxury. When I was a teenager, California sales tax did not apply to packaged food, but did apply to food bought at a restaurant. But there were exceptions to both of those cases: there was a snack tax that applied to some packaged foods (the list changed each year) so that some packaged foods were still taxed; and packaged food sold at a restaurant was exempt (I worked at Cinnabon, hot cinnamon rolls were taxed, after thirty minutes on the hot plate we let them cool down, refrosted and packaged them and they were no longer taxed; if somebody asked for packaged rolls when we were out, they got hot rolls in the box without paying sales tax). It’s also true that “income” isn’t always the interesting number. Somebody with a million dollars in the bank and no income doesn’t pay income tax, but they do pay sales tax. Of course, if the money came from wages in a previous year, they paid income tax then. If the money was an inheritance, it might have been taxed but the US keeps changing the details of the estate tax.
  - comeonseriously 5y ago
    > Why do we want to kill the incentive for starting companies and becoming wealthy? Because raising taxes isn't going to keep someone who would already be considering starting a business from starting a business. Do most people who start a business actually become wealthy?
    - tekknik 5y ago
      > Because raising taxes isn't going to keep someone who would already be considering starting a business from starting a business. How can you say that? Have you polled everyone starting businesses? This very thing happened to me with a distribution business in which taxes, and the potential for them being raised, made the business unprofitable compared to the same business running in China. > Do most people who start a business actually become wealthy? Subjective and impossible to calculate but by all means because not everybody can find a way we should kill it for everyone right? Because not everyone is smart enough to become a medical Dr, we should ban the profession or implement pay caps right?
fartingflamingo 5y ago
What about VAT then? Value added tax as levied in the EU is not a sales tax. It's also a very popular fraud mechanism...

whakim 5y ago

Sales taxes are logistically simple but also highly regressive, so the wealthy wouldn't even have to use loopholes to enjoy an ultra-regressive tax system :).

tekknik 5y ago
Why is the point to tax the wealthy more? Why do we want to kill the incentive for starting companies and becoming wealthy? My opinion, the left will only be happy with a 100% income tax and socialism.
- whakim 5y ago
  > Why is the point to tax the wealthy more? Why do we want to kill the incentive for starting companies and becoming wealthy? There isn't any evidence that tax rates much higher than those we currently have have been any obstacle to growth. Perhaps in theory, but many countries around the world and across history (including the United States!) have had much more progressive taxation regimes and it hasn't "kill[ed] the incentive for starting companies and becoming wealthy."
  - tekknik 5y ago
    > Perhaps in theory, but many countries around the world and across history (including the United States!) have had much more progressive taxation regimes and it hasn't "kill[ed] the incentive for starting companies and becoming wealthy." Which countries? And what happens when another country becomes more competitive than the US from a tax perspective? Will it destroy the country? certainly not. Will the US continue to be the world reserve currency and lead the world? Again, no.
    - whakim 5y ago
      The United States had very high income taxes from 1950 until 1980 (and also grew very fast during that period - much faster than in the period 1980-present). It is also worth noting that the United States was actually the leading advocate of very progressive income taxes during that period - convincing many other countries to adopt extremely high top tax rates on the wealthy. Today, most developed countries have higher top tax rates (and more progressive tax regimes) than the United States does - Germany, France, Sweden, Japan, etc. etc. > And what happens when another country becomes more competitive than the US from a tax perspective? This is a really important point and I'm glad you brought it up. The progressive taxation regime has been undermined over the past 30-40 years by the "Washington consensus" - the idea that free flows of goods and capital are paramount and that it should be US policy (as well as the policy of the IMF, World Bank, etc.) to pursue such ends via trade agreements and in exchange for loans. The issue is that free flows of capital leads to the exact problem you describe: a global race to the bottom on tax rates and a general nihilism about the possibility of an equitable tax regime. The long term challenge, then, is about building transnational agreements that are about more than just free flows of goods and capital: they must address issues of taxation as well.
- maxlybbert 5y ago
  The argument (with sales taxes) isn’t usually that they don’t let you soak the rich but that they’re too hard on the poor. Almost by definition, somebody living paycheck-to-paycheck is spending all their income. So their sales tax bill is going to be basically whatever the sales tax rate is applied to their income (e.g., a 7% sales tax rate applied to all of their income). Somebody who saves some of their income isn’t spending that portion, so in a year their sales tax bill will be smaller than the sales tax rate (e.g., if they save 10% of their income, then they’re only paying sales tax on the 90% that they spent). You could say this isn’t hard enough of the rich, or it’s too hard on the poor. Usually “too hard on the poor” is an easier argument to make. There are solutions, such as exempting food or other necessities (the poor probably spend a bigger portion of their income on food, so exempting food helps them more), or adding a luxury tax on things that the poor don’t buy, etc. Of course, then there’s an effort to define what should count as a necessity or what should count as a luxury. When I was a teenager, California sales tax did not apply to packaged food, but did apply to food bought at a restaurant. But there were exceptions to both of those cases: there was a snack tax that applied to some packaged foods (the list changed each year) so that some packaged foods were still taxed; and packaged food sold at a restaurant was exempt (I worked at Cinnabon, hot cinnamon rolls were taxed, after thirty minutes on the hot plate we let them cool down, refrosted and packaged them and they were no longer taxed; if somebody asked for packaged rolls when we were out, they got hot rolls in the box without paying sales tax). It’s also true that “income” isn’t always the interesting number. Somebody with a million dollars in the bank and no income doesn’t pay income tax, but they do pay sales tax. Of course, if the money came from wages in a previous year, they paid income tax then. If the money was an inheritance, it might have been taxed but the US keeps changing the details of the estate tax.
- comeonseriously 5y ago
  > Why do we want to kill the incentive for starting companies and becoming wealthy? Because raising taxes isn't going to keep someone who would already be considering starting a business from starting a business. Do most people who start a business actually become wealthy?
  - tekknik 5y ago
    > Because raising taxes isn't going to keep someone who would already be considering starting a business from starting a business. How can you say that? Have you polled everyone starting businesses? This very thing happened to me with a distribution business in which taxes, and the potential for them being raised, made the business unprofitable compared to the same business running in China. > Do most people who start a business actually become wealthy? Subjective and impossible to calculate but by all means because not everybody can find a way we should kill it for everyone right? Because not everyone is smart enough to become a medical Dr, we should ban the profession or implement pay caps right?

fartingflamingo 5y ago

What about VAT then? Value added tax as levied in the EU is not a sales tax. It's also a very popular fraud mechanism...