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Why do we tax human labor at all? We could just tax consumption, which would have obvious environmental benefits.
by chmod600 3y ago
Why do we tax human labor at all? We could just tax consumption, which would have obvious environmental benefits.
- PopAlongKid 3y agoWe (U.S) don't tax human labor. You can invest countless hours of your own effort into creating and/or improving property (including intangible property) and never pay a cent in tax. Instead, we tax income.
- UncleEntity 3y agoAnd consumption in the form of sales tax.
- chmod600 3y agoOk, why do we tax income and capital gains (which have few externalities) vastly more than consumption (which has a lot of externalities)?
- rmah 3y agoTaxing consumption discourages consumption which thus acts as a drag on the overall economy. Further, most people view it as "unfair" because a fixed consumption tax (sales, GST, VAT) results in lower income people paying a higher percentage of their income as tax. Progressive income taxation 1) does not discourage consumption as much as a higher consumption tax for those with lower income (which is most people), 2) encourages investment for companies and individuals with higher incomes.