4 ms·

I know that this isn't a serious piece of legislation, but just entertaining the idea of a consumption tax: wouldn't this hugely incentivize people to spend mon

I know that this isn't a serious piece of legislation, but just entertaining the idea of a consumption tax: wouldn't this hugely incentivize people to spend money overseas rather than domestically? Basically this would give people a huge discount if they take vacations abroad rather than domestically, to the point that it would make sense to do regular weekend trips to Mexico or Canada. In theory the government could try to tax consumption abroad, but in practice it seems like that would be very hard to enforce.

riku_iki 4y ago
another concerning point is that ultra-rich would be taxed much less, say now Bezos sells 100B of stock, he pays 20B in taxes (long term capital gain). With new tax he will pay nothing.
- bigfishrunning 4y ago
  How often does bezos sell 100B of stock, vs how often does he buy cars and boats and houses? you have to look at both sides of the scale, i'm not sure he'd end up paying less as a consumption/sales tax. I think the major argument is that the income tax is a mess, and very difficult to administer
  - riku_iki 4y ago
    > How often does bezos sell 100B of stock, vs how often does he buy cars and boats and houses? Bezos very likely sold much more stocks value wise than spent on boats and cars.
- knubie 4y ago
  He would pay taxes on whatever he spends that 100B on. If he just has 100B sitting in his bank account does that really benefit him? Money is not worth anything until it's spent. The problem with taxing money before it's spent is that you have no way of separating out "good" consumption (e.g. health care) from "bad" consumption (e.g. yachts, 2nd homes). That kind of system leads to convoluted tax codes and things like HSA's and using health insurance as a form of compensation.
  - riku_iki 4y ago
    > He would pay taxes on whatever he spends that 100B on. that's depends if reinvesting is counted as spend.

riku_iki 4y ago

another concerning point is that ultra-rich would be taxed much less, say now Bezos sells 100B of stock, he pays 20B in taxes (long term capital gain). With new tax he will pay nothing.

bigfishrunning 4y ago
How often does bezos sell 100B of stock, vs how often does he buy cars and boats and houses? you have to look at both sides of the scale, i'm not sure he'd end up paying less as a consumption/sales tax. I think the major argument is that the income tax is a mess, and very difficult to administer
- riku_iki 4y ago
  > How often does bezos sell 100B of stock, vs how often does he buy cars and boats and houses? Bezos very likely sold much more stocks value wise than spent on boats and cars.
knubie 4y ago
He would pay taxes on whatever he spends that 100B on. If he just has 100B sitting in his bank account does that really benefit him? Money is not worth anything until it's spent. The problem with taxing money before it's spent is that you have no way of separating out "good" consumption (e.g. health care) from "bad" consumption (e.g. yachts, 2nd homes). That kind of system leads to convoluted tax codes and things like HSA's and using health insurance as a form of compensation.
- riku_iki 4y ago
  > He would pay taxes on whatever he spends that 100B on. that's depends if reinvesting is counted as spend.