6 ms·

It all seems rather geared towards funneling money upward instead of downward. Individuals pay taxes on gross income, while businesses only pay taxes on net pro

by causi 3y ago

It all seems rather geared towards funneling money upward instead of downward. Individuals pay taxes on gross income, while businesses only pay taxes on net profit. A poor person makes a big purchase in the form of a new computer or television and pays sales tax, while a rich person makes a big purchase in the form of stock, pays no taxes, and then when he sells it he only pays taxes if he sells it at a gain and if he sells it at a loss he gets to subtract the loss from his income for the year. Fucking imagine if you bought a car and when you resold it you could subtract the depreciation from your income taxes. No wonder the French decided public decapitation was the only solution.

gruez 3y ago
>A poor person makes a big purchase in the form of a new computer or television and pays sales tax Because if you're buying it for personal use it's presumably for consumption, and if you're buying it for business use it's for business use. In the latter case you don't want to tax it because that would hurt businesses with low margins and give vertically integrated businesses an edge. There's definitely abuse of this with small businesses, where someone buys a pickup truck for "business use" but uses it for personal use, but that should be fixed with better enforcement of the tax code, not changing the tax regime entirely. >while a rich person makes a big purchase in the form of stock Because VAT/sales tax are consumption taxes, not a transaction tax. Stocks aren't consumed, so they aren't taxed. >Fucking imagine if you bought a car and when you resold it you could subtract the depreciation from your income taxes. So what are you advocating for? Abolition of all consumption taxes?
- causi 3y ago
  For the application of sales tax to all purchases including stock and the abolition of capital gains tax. give vertically integrated businesses an edge Why is that bad? Vertical integration allows the more efficient use of resources.
  - gruez 3y ago
    > For the application of sales tax to all purchases including stock So you want to make financial transactions more expensive and make the market less liquid? What good can come of this? >and the abolition of capital gains tax. What justification is there to tax someone buying $500 stocks and later selling it for $1000 the same as someone buying $1000 worth of stocks and selling it for $500? Taxing buying $500 worth of TVs makes sense, because it's presumably consumed, but it doesn't make sense for financial instruments. >Why is that bad? Vertical integration allows the more efficient use of resources. Companies already reap the savings from vertical integration. I'm not sure why the government should give them additional incentive to vertically integrate. Suppose the tax rate is 10% and we have two supply chains, one that's vertically integrated and the other that's not vertically integrated. Suppose further that both are equally efficient (which is plausible, given that nimble firms can outcomplete big conglomerates). Why should the government penalize the non-vertically integrated supply chain to the order of 10%?
    - anigbrowl 3y ago
      So you want to make financial transactions more expensive and make the market less liquid? What good can come of this? Fewer stock market bubbles, less asset inflation.
      - gruez 3y ago
        Market bubbles aren't caused by stocks trading back and forth. They're caused by irrational exuberance and macroeconomic factors.
        anigbrowl 3y ago
        People are less likely to be irrationally exuberant if there's an up-front cost to trading, no? Having to write a check (to to speak) to the government feels like real money, as opposed to the fantasy of sure-thing future profits that naive margin traders and property flippers may kid themselves into.
- anigbrowl 3y ago
  Because if you're buying it for personal use it's presumably for consumption So what? I already paid taxes on my income, now I need to pay additional taxes on what I consume...why? Kindly note here that I'm not arguing against the concept of paying taxes, but against the fact of being taxed on both income and outgoings.
  - gruez 3y ago
    >So what? I already paid taxes on my income, now I need to pay additional taxes on what I consume...why? It's covered in the wikipedia article: https://en.wikipedia.org/wiki/Consumption_tax https://en.wikipedia.org/wiki/Consumption_tax
    - anigbrowl 3y ago
      No, it really isn't. The closest is the bit about Alexander Hamilton favoring consumption taxes because they're politically harder to raise than income taxes. None of this articulates why I should pay tax on both earning and spending money.
      - gruez 3y ago
        >No, it really isn't. You must not be reading hard enough. "To the extent that taxing something results in less of it (whether income or consumption), taxing consumption instead of income should encourage both work and capital formation, which increases economic growth, while discouraging consumption.[3][4] Secondly, the tax base is larger because all consumption is taxed. " "Many economists and tax experts favor consumption taxes over income taxes for economic growth.[26][27][28] "
        anigbrowl 3y ago
        But my question from the outset was about the rationale for taxing both income and consumption, which I stated plainly and repeatedly. You're pointing me at arguments for a situation that doesn't exist in the present. Perhaps you're the one who should read more carefully.
- lmm 3y ago
  > Because if you're buying it for personal use it's presumably for consumption, and if you're buying it for business use it's for business use. Most of the biggest expenses in people's lives - housing in cities, cars for commuting, food - are for the sake of maintaining their job, or just staying alive. In a fair world they'd be able to deduct those expenses just as much as businesses can. (This doesn't just apply to VAT).
  - gruez 3y ago
    >In a fair world they'd be able to deduct those expenses just as much as businesses can. Okay but where do you draw the line between expense and consumption? Sure, you might need that BMW to "drive to work" but obviously a significant fraction of that car's purchase price isn't for "the sake of maintaining their job". Even a benchmark of "cheapest sedan you can buy" is tricky, because you can take public transit (depending on where you live), buy used, carpool, or bike. All of which get you to work but in a slightly worse way. Where do you draw the line between necessity and paying a premium for a better experience (ie. consumption)? Most tax regimes try to account for this, by incorporating a tax-free amount that's supposed to represent the amount need to maintain a basic lifestyle. Any amount above that is presumed to be above that's needed for a basic lifestyle and therefore "consumption".
    - lmm 3y ago
      > Sure, you might need that BMW to "drive to work" but obviously a significant fraction of that car's purchase price isn't for "the sake of maintaining their job". Even a benchmark of "cheapest sedan you can buy" is tricky, because you can take public transit (depending on where you live), buy used, carpool, or bike. All of which get you to work but in a slightly worse way. Where do you draw the line between necessity and paying a premium for a better experience (ie. consumption)? The thing is, a company can buy or lease that BMW as the CEO's company car and the taxman won't bat an eye. It's the double standard that really bothers me.
      - gruez 3y ago
        That's covered in my previous comment: >There's definitely abuse of this with small businesses, where someone buys a pickup truck for "business use" but uses it for personal use, but that should be fixed with better enforcement of the tax code, not changing the tax regime entirely. Also contrary to what you think company cars are taxed in the us, unless a very specific set of conditions are met. Your example most certainty not count https://www.irs.gov/publications/p15b#en_US_2023_publink1000193762 https://www.irs.gov/publications/p15b#en_US_2023_publink1000...
carlosjobim 3y ago
> Fucking imagine if you bought a car and when you resold it you could subtract the depreciation from your income taxes. Don't look up the accounting term "depreciation" for business taxation, or you're going to have a heart attack.

by causi 3y ago

gruez 3y ago

>A poor person makes a big purchase in the form of a new computer or television and pays sales tax Because if you're buying it for personal use it's presumably for consumption, and if you're buying it for business use it's for business use. In the latter case you don't want to tax it because that would hurt businesses with low margins and give vertically integrated businesses an edge. There's definitely abuse of this with small businesses, where someone buys a pickup truck for "business use" but uses it for personal use, but that should be fixed with better enforcement of the tax code, not changing the tax regime entirely. >while a rich person makes a big purchase in the form of stock Because VAT/sales tax are consumption taxes, not a transaction tax. Stocks aren't consumed, so they aren't taxed. >Fucking imagine if you bought a car and when you resold it you could subtract the depreciation from your income taxes. So what are you advocating for? Abolition of all consumption taxes?

causi 3y ago
For the application of sales tax to all purchases including stock and the abolition of capital gains tax. give vertically integrated businesses an edge Why is that bad? Vertical integration allows the more efficient use of resources.
- gruez 3y ago
  > For the application of sales tax to all purchases including stock So you want to make financial transactions more expensive and make the market less liquid? What good can come of this? >and the abolition of capital gains tax. What justification is there to tax someone buying $500 stocks and later selling it for $1000 the same as someone buying $1000 worth of stocks and selling it for $500? Taxing buying $500 worth of TVs makes sense, because it's presumably consumed, but it doesn't make sense for financial instruments. >Why is that bad? Vertical integration allows the more efficient use of resources. Companies already reap the savings from vertical integration. I'm not sure why the government should give them additional incentive to vertically integrate. Suppose the tax rate is 10% and we have two supply chains, one that's vertically integrated and the other that's not vertically integrated. Suppose further that both are equally efficient (which is plausible, given that nimble firms can outcomplete big conglomerates). Why should the government penalize the non-vertically integrated supply chain to the order of 10%?
  - anigbrowl 3y ago
    So you want to make financial transactions more expensive and make the market less liquid? What good can come of this? Fewer stock market bubbles, less asset inflation.
    - gruez 3y ago
      Market bubbles aren't caused by stocks trading back and forth. They're caused by irrational exuberance and macroeconomic factors.
      - anigbrowl 3y ago
        People are less likely to be irrationally exuberant if there's an up-front cost to trading, no? Having to write a check (to to speak) to the government feels like real money, as opposed to the fantasy of sure-thing future profits that naive margin traders and property flippers may kid themselves into.
anigbrowl 3y ago
Because if you're buying it for personal use it's presumably for consumption So what? I already paid taxes on my income, now I need to pay additional taxes on what I consume...why? Kindly note here that I'm not arguing against the concept of paying taxes, but against the fact of being taxed on both income and outgoings.
- gruez 3y ago
  >So what? I already paid taxes on my income, now I need to pay additional taxes on what I consume...why? It's covered in the wikipedia article: https://en.wikipedia.org/wiki/Consumption_tax https://en.wikipedia.org/wiki/Consumption_tax
  - anigbrowl 3y ago
    No, it really isn't. The closest is the bit about Alexander Hamilton favoring consumption taxes because they're politically harder to raise than income taxes. None of this articulates why I should pay tax on both earning and spending money.
    - gruez 3y ago
      >No, it really isn't. You must not be reading hard enough. "To the extent that taxing something results in less of it (whether income or consumption), taxing consumption instead of income should encourage both work and capital formation, which increases economic growth, while discouraging consumption.[3][4] Secondly, the tax base is larger because all consumption is taxed. " "Many economists and tax experts favor consumption taxes over income taxes for economic growth.[26][27][28] "
      - anigbrowl 3y ago
        But my question from the outset was about the rationale for taxing both income and consumption, which I stated plainly and repeatedly. You're pointing me at arguments for a situation that doesn't exist in the present. Perhaps you're the one who should read more carefully.
lmm 3y ago
> Because if you're buying it for personal use it's presumably for consumption, and if you're buying it for business use it's for business use. Most of the biggest expenses in people's lives - housing in cities, cars for commuting, food - are for the sake of maintaining their job, or just staying alive. In a fair world they'd be able to deduct those expenses just as much as businesses can. (This doesn't just apply to VAT).
- gruez 3y ago
  >In a fair world they'd be able to deduct those expenses just as much as businesses can. Okay but where do you draw the line between expense and consumption? Sure, you might need that BMW to "drive to work" but obviously a significant fraction of that car's purchase price isn't for "the sake of maintaining their job". Even a benchmark of "cheapest sedan you can buy" is tricky, because you can take public transit (depending on where you live), buy used, carpool, or bike. All of which get you to work but in a slightly worse way. Where do you draw the line between necessity and paying a premium for a better experience (ie. consumption)? Most tax regimes try to account for this, by incorporating a tax-free amount that's supposed to represent the amount need to maintain a basic lifestyle. Any amount above that is presumed to be above that's needed for a basic lifestyle and therefore "consumption".
  - lmm 3y ago
    > Sure, you might need that BMW to "drive to work" but obviously a significant fraction of that car's purchase price isn't for "the sake of maintaining their job". Even a benchmark of "cheapest sedan you can buy" is tricky, because you can take public transit (depending on where you live), buy used, carpool, or bike. All of which get you to work but in a slightly worse way. Where do you draw the line between necessity and paying a premium for a better experience (ie. consumption)? The thing is, a company can buy or lease that BMW as the CEO's company car and the taxman won't bat an eye. It's the double standard that really bothers me.
    - gruez 3y ago
      That's covered in my previous comment: >There's definitely abuse of this with small businesses, where someone buys a pickup truck for "business use" but uses it for personal use, but that should be fixed with better enforcement of the tax code, not changing the tax regime entirely. Also contrary to what you think company cars are taxed in the us, unless a very specific set of conditions are met. Your example most certainty not count https://www.irs.gov/publications/p15b#en_US_2023_publink1000193762 https://www.irs.gov/publications/p15b#en_US_2023_publink1000...

carlosjobim 3y ago

> Fucking imagine if you bought a car and when you resold it you could subtract the depreciation from your income taxes. Don't look up the accounting term "depreciation" for business taxation, or you're going to have a heart attack.