Consumption tax is sales/VAT tax excluding some necessities and capital goods. Yes, there are some awkward edge cases: in the UK the exclusions were food and children's clothes, which leads to battles over prepared cold food (e.g. sandwich), takeaway and restaurant dining.
Sin taxes are obviously things society might want to discourage, mainly for health reasons, like alcohol and smoking, but also gambling and externalities, like pollution. Some might stretch that to all carbon emissions to moderate climate change.
Don't tax things you want: working / income and investment / capital gains.
Inheritance tax is doubly wrong because the wealth is already taxed, and death is unavoidable (but emigration is possible, which might help in some countries).
Canada just gives you a fixed amount of cash every year for the sales tax that they estimate that you paid on a regular amount of consumption (HST credit) which solved that problem.
I don't think it's fair that someone who earns $400k and spends $400k is paying roughly the same taxes as someone earning $400k and spending $100k. You should pay more taxes the more luxurious your life is, not the more productive you are.
Where's the other 300k going? If you aren't spending it, what does it matter if it all gets taxed to nothing? And if you end up spending it, then boom there's your consumption that needs to be taxed.
In a world where you are the supreme ruler, then what you individually want matters. In our actual world, it’s more about what the society in general wants.
Property taxes on real property or possibly land value tax (it's a limited resource, at least in places where people want to live, and requires a lot of public infrastructure to support its value there).
Tariffs, various usage taxes and fees.
Need a mechanism to address the regressiveness of some of this but that's an implementation detail.
Their take on inheritance taxes is insane, but I tend to agree that income taxes are immoral. Corporations get taxed on profits: If OkayPhysicist, Inc. spends $200 to make $300, it would be taxed some fraction of $100. Individuals, on the other hand, get taxed on revenue. It doesn't matter if it costs me $4000 in rent, groceries, transportation, etc., to make $6000, I'm getting taxed on that full $6000.
Capital gains taxes, on the other hand, are completely moral, and should be much, much higher. Capital investment benefits enormously from the State protecting their property "rights" (you don't need to hire a private army to prevent the workers from just deciding to run your factory for their own benefit, that's what the cops are for), and at a minimum the state would be justified in collecting that dividend for itself. Bootlickers and profession bootlickers (i.e., economists) would complain that a high capital gains tax disincentives investment, but as long as the value of investment is positive, that is, outpacing inflation, it makes zero sense to let your money languish in a Scrooge McDuck pile rather than get some value out of it.
>It doesn't matter if it costs me $4000 in rent, groceries, transportation, etc., to make $6000, I'm getting taxed on that full $6000.
So if I spend $5000 on groceries because I'm eating wagyu steak and lobster everyday, is that a fair "expense" too? You might retort that's obviously a luxury and there should be some baseline that's tax free, but then you're just describing the standard deduction.
>but as long as the value of investment is positive, that is, outpacing inflation, it makes zero sense to let your money languish in a Scrooge McDuck pile rather than get some value out of it.
Businesses don't pay extra tax because they chose to met their needs at a greater-than-minimum cost. If my boss buys some reagents from Dave for $300 bucks instead of Bill's $200 offer, the company's not paying taxes based on a hypothetical $200 cost basis.
If we want to tax "luxury" expenses, we have excise taxes for that.
Consumption taxes and sin taxes.
Consumption tax is sales/VAT tax excluding some necessities and capital goods. Yes, there are some awkward edge cases: in the UK the exclusions were food and children's clothes, which leads to battles over prepared cold food (e.g. sandwich), takeaway and restaurant dining.
Sin taxes are obviously things society might want to discourage, mainly for health reasons, like alcohol and smoking, but also gambling and externalities, like pollution. Some might stretch that to all carbon emissions to moderate climate change.
Don't tax things you want: working / income and investment / capital gains.
Inheritance tax is doubly wrong because the wealth is already taxed, and death is unavoidable (but emigration is possible, which might help in some countries).
Consumption taxes disproportionately impact the less wealthy, who spend most of what they earn on consumption of necessities.
> Don't tax things you want: working / income and investment / capital gains.
What if I don't want hoarding of wealth?
Canada just gives you a fixed amount of cash every year for the sales tax that they estimate that you paid on a regular amount of consumption (HST credit) which solved that problem.
I don't think it's fair that someone who earns $400k and spends $400k is paying roughly the same taxes as someone earning $400k and spending $100k. You should pay more taxes the more luxurious your life is, not the more productive you are.
Where's the other 300k going? If you aren't spending it, what does it matter if it all gets taxed to nothing? And if you end up spending it, then boom there's your consumption that needs to be taxed.
In a world where you are the supreme ruler, then what you individually want matters. In our actual world, it’s more about what the society in general wants.
> In our actual world, it’s more about what the society in general wants.
God, if only!
In the actual world, it's more about what the powerful want.
Why do you think billionaires spent more fighting Mamdani than they stood to lose in new taxes?
> So what taxes aren't "morally wrong"?
Taxes on somebody else.
Property taxes on real property or possibly land value tax (it's a limited resource, at least in places where people want to live, and requires a lot of public infrastructure to support its value there).
Tariffs, various usage taxes and fees.
Need a mechanism to address the regressiveness of some of this but that's an implementation detail.
How is dynastic wealth not immoral?
Their take on inheritance taxes is insane, but I tend to agree that income taxes are immoral. Corporations get taxed on profits: If OkayPhysicist, Inc. spends $200 to make $300, it would be taxed some fraction of $100. Individuals, on the other hand, get taxed on revenue. It doesn't matter if it costs me $4000 in rent, groceries, transportation, etc., to make $6000, I'm getting taxed on that full $6000.
Capital gains taxes, on the other hand, are completely moral, and should be much, much higher. Capital investment benefits enormously from the State protecting their property "rights" (you don't need to hire a private army to prevent the workers from just deciding to run your factory for their own benefit, that's what the cops are for), and at a minimum the state would be justified in collecting that dividend for itself. Bootlickers and profession bootlickers (i.e., economists) would complain that a high capital gains tax disincentives investment, but as long as the value of investment is positive, that is, outpacing inflation, it makes zero sense to let your money languish in a Scrooge McDuck pile rather than get some value out of it.
>It doesn't matter if it costs me $4000 in rent, groceries, transportation, etc., to make $6000, I'm getting taxed on that full $6000.
So if I spend $5000 on groceries because I'm eating wagyu steak and lobster everyday, is that a fair "expense" too? You might retort that's obviously a luxury and there should be some baseline that's tax free, but then you're just describing the standard deduction.
>but as long as the value of investment is positive, that is, outpacing inflation, it makes zero sense to let your money languish in a Scrooge McDuck pile rather than get some value out of it.
...or they take their money elsewhere instead.
Businesses don't pay extra tax because they chose to met their needs at a greater-than-minimum cost. If my boss buys some reagents from Dave for $300 bucks instead of Bill's $200 offer, the company's not paying taxes based on a hypothetical $200 cost basis.
If we want to tax "luxury" expenses, we have excise taxes for that.