Unrelated, but I recently had an interesting idea about taxation. Everyone since forever is trying to tax profits. But profits are very easy to manipulate beca

Unrelated, but I recently had an interesting idea about taxation. Everyone since forever is trying to tax profits. But profits are very easy to manipulate because you can invent costs out of thin air to avoid paying taxes for specific income in specific places. There were some attempts at taxing corporate income (and it's prevalent way of taxing poor individuals) but it has a problem of stifling industries that have high incomes but also high costs. What if we taxed costs instead? If you are spending the money it means you have money to spend. Why not let country skim that a bit instead? There are some things in taxation that work like that. For example VAT which is ostensibly a tax on value added but in practice is a tax on consumption on the final consumer. Similarily sales tax. Energy taxes. Surprisingly also social security fees. Those are effectively taxes levied on corporations for spending money on labor. That's why they are insanely effective because while corporations can very easily hide profits they can't hide what they pay their workers for the labor they need. There's strong moral opposition to income taxes because people see them as a punishment for being successful or working hard. It would be way harder to spin taxes on costs this way. Those would be a punishment for not being able to do more with less. So you basically need to tax buyers of everything. Products, services, rights, licenses, assets, rents, raw labor. Those taxes can be collected either form buyer or the seller, whoever is easier to scrutinize and collect. The issue with this scheme is there's incentive for buyers to ask sellers to hide the sale to save on tax. Currently also sellers have an incentive to hide sales to hide profits that are also taxed. So by removing income taxes we diminish this incentive. Sellers also have slight disincentive to hide the sale, for example because if they have a cost in the future they could be cross-checked if they had enough money to bear that cost. To give them further incentive their income could even award them tax credit towards taxes on costs. Sort of a reverse VAT system. This might be prone to fraud as all tax deductions are and possibly unnecessary (unless for subsidizing those heavy cost, high profit industries) but profits are way harder to fake than costs.