3 ms·
> Not really especially for W2 employees as they have very few deductions Right. Individuals are taxed on income and not consumption. Taxes don’t go down if t
by dpark 3mo ago
> Not really especially for W2 employees as they have very few deductions
Right. Individuals are taxed on income and not consumption. Taxes don’t go down if they save instead of spend (in fact they go up as they are taxed on the interest earned). There’s nothing about this that’s consumption based so a replacement system that looks basically the same but with more deductions is also not a consumption tax.
Businesses are weird already and are taxed on profit rather than income. Anything that reduces profit on paper reduces tax, whether it’s actually consumption or not (e.g. stock buy backs).
- satvikpendem 3mo agoHence allowing individuals to not have income tax but instead have deductions based on consumption as that stimulates the economy.
- dpark 3mo agoI don’t know what this means. You’re hand waving “based on consumption”. There is no magic deduction that turns an income tax into a consumption tax. Also you seem to have reversed your stance and are basing deductions on consumption. So the exact opposite of a consumption-based tax.
- satvikpendem 3mo agoYeah, looks like I reversed it, my bad. But it's an interesting model, not taxing consumption at all but savings instead (not necessarily investment as something like a 401k would still be untaxed).