You may be a fan of replacing the income tax with a consumption tax.
In the end countries spend a high percentage of GDP on thing people actually want. Everything after that is just deciding who pays for it.
PS: Consumption taxes also push people to vacation and retire in different countries.
Huh?
That comment suggested
> The problem is that under the current tax scheme in the US people are taxed on their total income and companies are taxed on their profits.
and
> I think if we could just get rid of the income tax somehow (like have a land tax instead) the country would be so much better off.
Replacing the income tax with a consumption tax follows directly from both of those points. As to the first, it replaces the system where companies are taxed on profits and people are taxed on revenue with a system where companies are taxed on profits and people are taxed on profits. As to the second, obviously, it gets rid of the income tax.
What were you thinking your GP comment said?
Setting aside the oddity of talking about profit of people, given constant income, you pay less consumption tax as your profit goes up.
Consumption is expenses, profit = income - expenses.
Rearranging. Consumption tax = y * expenses = y * (income - profit) where y is the consumption tax rate. So, as profits increase, expenses decrease and consumption tax goes down.
> Consumption is expenses, profit = income - expenses.
No, a person's profits are their consumption. Savings are not profits -- they don't benefit you at all.
There's a chain going like this:
Company spends money so that company receives (more) money so that person receives money so that person can spend money.
The goal of the company is to accumulate money for someone else and that's how its profits are measured. Profit is money the company loses by paying it out to its owners. (Money the company loses by paying it out to non-owners is "expenses".)
The goal of the person is to spend money on things it can actually use; for the person, money is an accounting tool, not an end goal. But we can identify profit the same way. Money that you lose by paying it out to yourself ("consumption") is your profit; savings is just money you might one day allocate to profit.
On the other hand, I don’t think it would create much tax revenue.
We only gave our government the right to institute an income tax thanks to the idiots who banned alcohol. Before that the feds relied on alcohol taxes to survive.
Play stupid games, win stupid prizes.
https://www.heinzhistorycenter.org/blog/at-the-history-cente...
Let me paraphrase Adam Gopnik's recent book, "A Thousand Small Sanities: The Moral Adventure of Liberalism": When you talk about "the capital I pull in," you're risking celebrating the driver while taking cars, roads, and gasoline for granted. [0]
See also Elizabeth Warren's famous talk in her first Senate campaign: "There is nobody in this country who got rich on their own. Nobody. You built a factory out there - good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory... Now look. You built a factory and it turned into something terrific or a great idea - God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.” [1]
And of course Barack Obama's correct statement, intentionally taken out of context by the right: "You didn't build that" (referring to the roads and bridges that businesses depend on). [2]
[0] https://www.amazon.com/Thousand-Small-Sanities-Adventure-Lib... (not an affiliate link).
[1] https://www.goodreads.com/quotes/439207-there-is-nobody-in-t... — also YouTube: https://www.youtube.com/watch?v=60fQCDqXfq0
[3] https://www.amazon.com/Economists-Hour-Prophets-Markets-Frac...
If you combine this with UBI + Single Payer + Free College -- then everyone will be able to afford the taxes they will pay on goods/services at the store/etc.
If the lowest safety net keeps just about everyone around 35-45k with medical safety, then they can probably afford 5-10k in VAT fees, and if they no longer peg benefits to companies -- people have more fluidity about where they work based on the fact they aren't going to lose their medicare for all.
This also means those who are fine not working and living on UBI ALSO drive up the rate of pay for those who DO want to work because supply/demand of workers will go down.