Consumption is a regressive tax - like a flat (dollar-amount-per-person) tax.
Given the reduced frequency of cash transactions, it might be feasible.
For example, $0 to $50k per year spend is taxed at 0%, then $50k to $100k is 10%, etc.
Although a continuous exponential function is preferable than discrete cliffs.
Now imagine a rich person making $200k, spending $100k taxed at 10% because of marginal increases, and saving the rest. The rich person also pays a net tax rate of 5%.
We're living that right now with inflation and supply chain scarcity. The wealthy have what they need and can afford to wait or shop around. The immediacy of need for a one car household to replace their only vehicle puts them at the whims of a highly fluctuating car market. A wealthy household can afford regular maintenance, more reliable cars, or just to Uber around every day.
At scale, we can't buy the computer components we need at a price that isn't a huge markup of what we paid three years ago, which either gets passed on to customers or means we have to limit our service offerings. Instead, we're suspending some operations and waiting it out while we rework some designs. We're about as big and wealthy as orgs get and can survive it.
The cash benefits tax rates can also be increased.
As a rough outline:
UBI to ensure minimum quality of life
Marginal sales tax to tax luxury purchases more than necessity purchases
Estate tax to prevent too wide of wealth gap.
The goal would be to incentivize income and disincentivize profligate spending. If one does not want to be at the whims of a highly fluctuating car market, then they have to plan accordingly. But in the worst case, the UBI will be the safety net, and whether or not that means they can afford a car is up to society.
> At scale, we can't buy the computer components we need at a price that isn't a huge markup of what we paid three years ago, which either gets passed on to customers or means we have to limit our service offerings. Instead, we're suspending some operations and waiting it out while we rework some designs. We're about as big and wealthy as orgs get and can survive it.
I am not sure how this relates, but I think this is getting more into anti trust rather than personal taxes. Either way, I think society should reward businesses (or individuals) that invest in robustness/redundancies/resiliencies.
Consumption up to that amount is taxed at 0%. Marginal consumption above that amount is taxed at 20%.
Making sales tax less regressive would be a good thing.
The implementation difficulties don't bother me per se; I think what's making me not like this idea is that it wouldn't do much for wealth disparity. If you're Wealthy with a capital W, you don't really spend that much, compared to your income.
But even if I'm also interested in tax policies to decrease the accumulation of massive amounts of wealth and the accompanying power in the hands of a single individual, I shouldn't dislike a tax policy that would do a different good thing -- if it could be implemented -- just because it doesn't do the other thing I want.
These problems can be solved via extremely high estate taxes or property taxes.