5 ms·

Ask HN: What if we do away with all taxes and impose only a Consumption Tax?

2 points by NoRagrets 5y ago

deleted 5y ago
[deleted]
josephcsible 5y ago
Wouldn't this be quite regressive?
- jelliclesfarm 5y ago
  It seems logical. Sustainability is tied to consumption. Water and non renewable resources would become dearer. We are going to face a kind of inflationary pressure ..mostly due to supply chain pressures. I think macro economic outlooks can’t afford to be static. It has to keep evolving with changing circumstances because the world has changed. Our consumption, resources and threshold levels have changed. Anyways..it was like a thought experiment. It didn’t take long for me to just embrace the notion. Would like to hear other perspectives.
dahdum 5y ago
The transition would be brutally unfair as everyone with savings would essentially be double taxed. It's super regressive and allows tax free investment growth, so the rich will get richer and low/middle class forced to consume less. Despite exacerbating income and wealth inequality, it might reduce CO2 through reduced consumption. I can't see how it would ever be worthwhile to switch, but maybe if you started your society that way you could continually tweak it.
- tomjen3 5y ago
  You could except current savings and not have consumption taxes on basic goods which is already the case in certain places.
- jelliclesfarm 5y ago
  Maybe it will change our society from a monetary one to a liveable one. Everything we do now is measured in terms of money. Define ‘rich’. For the longest time, everyone was able to be happy without money. Consumption tax would remove the power money has over society.
haspoken 5y ago
Taxes are not just used to raise revenue, but are also used as a way to control behavior.
transfire 5y ago
I think a Usury tax would be better. It would put less of the burden on the poor since they don’t take out loans, and it would be easier to administer as the lenders would handle it.
torstenvl 5y ago
Any transaction that is taxed is disincentivized. By disincentivizing consumption as compared to saving, you would reduce spending and therefore the velocity of money. https://en.wikipedia.org/wiki/Velocity_of_money https://en.wikipedia.org/wiki/Velocity_of_money By reducing the velocity of money, you would trash the economy. TLDR: Money would sit in banks. Anyone doing anything for work that wasn't an absolute necessity (i.e., things with inelastic demand) would take a huge hit. Everyone would be worse off.
- jelliclesfarm 5y ago
  What if we had a different metric for reward other than money? Should we create/invent one? Because this money horse has been flogged to death and it’s time for change.
  - zaphar 5y ago
    It sounds as if you are suggesting a change with no mechanism to mitigate the adverse effects of that change and no supporting evidence for the proposed benefit of the change. Decisions made based on "We have to do something and this is something" has never worked out really well for society.
    - jelliclesfarm 5y ago
      agreed. consider this a thought experiment. how can we gamify this so the rewards for playing the game of life is sustainable and not stackable without any base support like our current economic system. 'money' is a man made construct afterall. so lets create another one. this current economic one is standing on anthills..on one foot.
      - zaphar 5y ago
        I'm of the opinion that this is unsolveable. I can envision no solution that is not worse than what we currently have. I wish you luck in proving me wrong.
- 5y ago
toast0 5y ago
There wouldn't be enough revenue as not many people have Tuberculosis, formerly known as Consumption.
jelliclesfarm 5y ago
https://taxfoundation.org/consumption-tax-policies/ https://taxfoundation.org/consumption-tax-policies/ [..] Consumption taxes provide a major source of revenue in OECD countries. On average in 2019, consumption taxes made up 32.3 percent of total revenues in OECD countries. In Chile, 53.1 percent of total revenues were from consumption taxes while in the United States, consumption taxes accounted for just 17.6 percent of total tax revenue. When measured as a share of GDP, Hungary leads OECD countries with consumption taxes measuring 16.2 percent of GDP. The United States is again at the low end with consumption taxes raising 4.3 percent of GDP.[..]

2 points by NoRagrets 5y ago

deleted 5y ago

[deleted]

josephcsible 5y ago

Wouldn't this be quite regressive?

jelliclesfarm 5y ago
It seems logical. Sustainability is tied to consumption. Water and non renewable resources would become dearer. We are going to face a kind of inflationary pressure ..mostly due to supply chain pressures. I think macro economic outlooks can’t afford to be static. It has to keep evolving with changing circumstances because the world has changed. Our consumption, resources and threshold levels have changed. Anyways..it was like a thought experiment. It didn’t take long for me to just embrace the notion. Would like to hear other perspectives.

dahdum 5y ago

The transition would be brutally unfair as everyone with savings would essentially be double taxed. It's super regressive and allows tax free investment growth, so the rich will get richer and low/middle class forced to consume less. Despite exacerbating income and wealth inequality, it might reduce CO2 through reduced consumption. I can't see how it would ever be worthwhile to switch, but maybe if you started your society that way you could continually tweak it.

tomjen3 5y ago
You could except current savings and not have consumption taxes on basic goods which is already the case in certain places.
jelliclesfarm 5y ago
Maybe it will change our society from a monetary one to a liveable one. Everything we do now is measured in terms of money. Define ‘rich’. For the longest time, everyone was able to be happy without money. Consumption tax would remove the power money has over society.

haspoken 5y ago

Taxes are not just used to raise revenue, but are also used as a way to control behavior.

transfire 5y ago

I think a Usury tax would be better. It would put less of the burden on the poor since they don’t take out loans, and it would be easier to administer as the lenders would handle it.

torstenvl 5y ago

Any transaction that is taxed is disincentivized. By disincentivizing consumption as compared to saving, you would reduce spending and therefore the velocity of money. https://en.wikipedia.org/wiki/Velocity_of_money https://en.wikipedia.org/wiki/Velocity_of_money By reducing the velocity of money, you would trash the economy. TLDR: Money would sit in banks. Anyone doing anything for work that wasn't an absolute necessity (i.e., things with inelastic demand) would take a huge hit. Everyone would be worse off.

jelliclesfarm 5y ago
What if we had a different metric for reward other than money? Should we create/invent one? Because this money horse has been flogged to death and it’s time for change.
- zaphar 5y ago
  It sounds as if you are suggesting a change with no mechanism to mitigate the adverse effects of that change and no supporting evidence for the proposed benefit of the change. Decisions made based on "We have to do something and this is something" has never worked out really well for society.
  - jelliclesfarm 5y ago
    agreed. consider this a thought experiment. how can we gamify this so the rewards for playing the game of life is sustainable and not stackable without any base support like our current economic system. 'money' is a man made construct afterall. so lets create another one. this current economic one is standing on anthills..on one foot.
    - zaphar 5y ago
      I'm of the opinion that this is unsolveable. I can envision no solution that is not worse than what we currently have. I wish you luck in proving me wrong.
5y ago

toast0 5y ago

There wouldn't be enough revenue as not many people have Tuberculosis, formerly known as Consumption.

jelliclesfarm 5y ago

https://taxfoundation.org/consumption-tax-policies/ https://taxfoundation.org/consumption-tax-policies/ [..] Consumption taxes provide a major source of revenue in OECD countries. On average in 2019, consumption taxes made up 32.3 percent of total revenues in OECD countries. In Chile, 53.1 percent of total revenues were from consumption taxes while in the United States, consumption taxes accounted for just 17.6 percent of total tax revenue. When measured as a share of GDP, Hungary leads OECD countries with consumption taxes measuring 16.2 percent of GDP. The United States is again at the low end with consumption taxes raising 4.3 percent of GDP.[..]