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Well, just to play the devil's advocate a bit, this is definitely a crazy idea but it might have some logic to it: 1) taxing consumptions instead of income has
by throw310822 2y ago
Well, just to play the devil's advocate a bit, this is definitely a crazy idea but it might have some logic to it:
1) taxing consumptions instead of income has the advantage of being much harder to evade. It puts an end to tricks like living off loans or even simply detracting expenses- you cannot detract anything if you're not taxed at all;
2) only taxing imported goods means that anything that benefits the local economy can be purchased tax-free; while imports from abroad become, say, twice as expensive as before. However, you also have a much higher disposable income and, at least at the beginning, no other option.
So the gist of it would be: we levy the same amount of money as before by taxing exclusively consumptions, and we exempt from taxation all domestically produced goods because it's still money reinvested in the economy.
- tempestn 2y agoThe problem is that you massively distort the economy, making it less efficient aka poorer. And that's even before considering the fact that other countries will retaliate.
- Whoppertime 2y agoWasn't the income tax introduced as a temporary measure in WW1, and prior to that the majority of state income was generated via tariffs? Shifting the burden can certainly cause distortions, but we already caused those distortions getting into this situation in the first place.
- tempestn 2y agoTariffs were done in the past because they were easier, but I think they distort less than an income tax. You're literally favoring domestic producers, right?