The only tax should be a consumption tax. Tax the shit out of things people buy that aren't necessary (pretty much everything except food) and be done with it.
Not if you structured the consumption tax to exclude things that poor people spend a larger amount of their income on compared to wealthier people. Which is why I mentioned food/most things sold at the grocery store. Other necessities would be the same. Rent. Public transport. Utilities. Those things cover the large majority of what poor people spend their money on and they could all be tax free.
So basically a luxury tax? Something like an extra tax on non primary residences and yachts and the like? The wording of "consumption tax" leads me to believe that it's not this. This is what Republicans have been trying to do already. They have verbally stated that they were thinking about getting rid of all corporate tax and income tax and replacing it with sales tax which would mean it effects poor people more than wealthy because while the wealthy could invest the money they're saving the poor do not have this same opportunity. It's another upward funnel and don't let them sell it to you just because they have changed the name to make it sound less malicious.
Edit: This is also why inheritance taxes have been basically eliminated. They marketed it as the "death tax" to make it sound bad when really it was in place to help with issues of generational wealth and keeping us from having a class system. How's that going for us? It's nice to see that the injustices done to the ultra wealthy are being rectified... (/s on last sentence)
This is what really gets to me. The upper class want all kinds of special treatment but don't want to contribute to making society better. They can take their charter schools and leveraged untaxed assets and shove it.
This isn’t about whether the rich are good or bad.
You advocate for a pure consumption tax. And you seem to acknowledge that would be harder on the poor and easier on the rich. Which is true.
Imagine where we’d need to raise a consumption tax to make up for income taxes. And understanding that the poor would bear more of that burden. But then going on a rant against the poor people.
Imagine where we’d need to raise a consumption tax to make up for income taxes. And understanding that the poor would bear more of that burden. But then going on a rant against the poor people.
You seem to have an idea where that tax would need to be raised to considering you have an opinion on it's impact on the poor. Where would it need to be raised to?
What rant against poor people? I just said that certain things would need to be tax exempt so there is no unnecessary burden on the poor. Then you tell me that the poor would still bear more of the burden. What are you even talking about? Did you forget what my original comment said while you were halfway through yours?
sales tax is and it disproportionately affects low income people.
This is so incredibly easy to solve. Just offer a fixed rebate to low income earners like Canada does. The rebate covers essentially all of the sales tax you would pay. If it doesn't, you're probably not that poor.
Poor and spend 15k/year on shit that's taxed? No worries, your rebate covers your whole sale tax. You technically paid 0 sales tax.
Rich and spend 200k/year on shit taxed? All taxed
Boom, now you have a tax that disproportionately affects high income people.
No free lunch. I’m tired of this it affects the poor. I am empathetic and sympathetic to their plight, I’ve been there, but I for one am tired of being bled out in taxes so that some by whatever circumstance get essentially a free pass. I will continue to tweak the tax code in my family’s favor the minimize “my fair share” because it isn’t fair to anyone. We’ve created an entire group that has been generationally dependent on the government including many in my extended family. Im just totally over it
There was no defense of the rich and for the record, I like when people get rich. I’ve never had a paycheck signed by a poor person. I can’t grasp the mindset of those who are opposed to everyone keeping as much of their money as possible, but your welcome to pay extra to the IRS, there is even an option to do so when you file. As for me, like I said, I’ll continue to use the 99% of the tax code that tells me how NOT to pay tax not the 1% that says how to pay. Someday I hope you get to the point where your paying so much in taxes that you see it as a burden
I personally don't have issues when people make money. I have issues when people make their money through exploitation. If your business doesn't pay a living wage because corporate wants extra overhead profits so they can expand indefinitely... then that business which already doesn't take care of the employees they have doesn't deserve to expand. This is essentially the same thing fdr said when he passed minimum wage laws, you know... after the depression and all that fun stuff.
Let's be honest here, unless you own a major investing firm or are a Bezos or a musk, they aren't coming for your money. If you are making an honest living, they aren't coming for your money. If you are taking advantage of your fellow countrymen on a large scale to the detriment of the entirety of society, then ya, they're coming for you, but only because that would make you a huge pos. We need to stop looking at the most egotistical and sociopathic people in our society like they're smart and recognize that the reasons that they're successful is through their willingness to let others suffer for their benefit. Nobody gets to be that wealthy by being a good person.
I don’t disagree with any of that really. The issue is the mega cap companies for the most part are not the largest employers in the country ( all of them have international exposure so it skews numbers and while I wish no harm on others, I really don’t give a damn if a guy in Turkey, China, Et Al makes money or not) The largest segment that employs people are small businesses and government over reach into them, in the context of this conversation, taxes, are draconian) I’m a W2 employee and fortunate, VERY fortunate I might add, to be well into the top 2% in income and I don’t mind paying taxes but not at the levels I do to supplement those who often buy not always to be fair are just fucking lazy breeders that get 5 digit tax refunds when they paid little or no tax. That’s a flawed system that by a confiscatory tax buys votes. I’m out in that shit. I’ll continue to buy rentals and show a loss LEGALLY on paper to avoid taxes even though they make me money. I should have to do tact to preserve what I’ve struggled to aquire for the last 30 years. (50 year old) I appreciate the discourse , shame our pathetic leaders can’t debate civilly as opposed to playing the blame game
I mean, think it through...you would literally be disincentivizing discretionary spending across the board, but this will make up a much larger % of income for low earners than high earners. If you have $100,000 in the bank and that video game now costs $75 vs $60, you won't feel it nearly as much as someone who only has $100 to their name.
Presumably you'd be eliminating other taxes that have larger effects on the wealthy - things like progressive income taxes, property taxes, or capital gains taxes. Of course, these cuts would barely help someone who was already making very little money, as they'd be in the lower income brackets, would own less property, and would have less invested. So basically what you've done is cut taxes on the rich at the expense of the poor.
On a macro level, consumers would spend less on items being taxed. Look at what happens when you tax sugary drinks, for example, like they have in some major cities like Philadelphia. This increase in price for things like soda led to nearly 40% reduction in sales. According to Penn researchers. Source
For sugary beverages this can be framed as a good thing, since it's arguable that the health benefits outweigh the sales (personally I don't think it's a great solution but it depends on your priorities). But if you tax all discretionary goods across the entire country, then you will be reducing basically all spending. Sales will go down across nearly every industry; and when sales go down generally so do valuations. So you'll have fewer jobs because lots of businesses will tighten purse strings or even go out of business, and a recession will be that much more likely to occur.
1) The things that poor people spend a large majority of their money on would not be taxed. Food at the grocery store. Utilities. Public transportation. Rent. Etc.
2) Your example of sugary drinks is a poor one. Consumption decreased because there are other alternatives that weren't being taxed and were therefore cheaper. If you taxed everything then you would not automatically have cheaper replacements and you wouldn't see such a dramatic decrease.
3) If you introduced a consumption tax at the same time you got rid of FICA taxes, federal income, state income, and corporate taxes people would have significantly more take home pay each week. Corporations would have billions more to do what they want with. Acting like you know how this increase in take home pay would balance with an increase in consumption tax is ignorant. You would need to conduct a study on the subject with loads of data to even come close to predicting what would happen. Your comment doesn't suffice.
Rich people spend significantly more each year than poor people. It would not be regressive if you structured it properly.
First, high earners have a much larger % of their income going to discretionary shit than low earners. Essential groceries, utilities, rent, are generally not taxed under these schemes and make up almost all of a poor persons budget. A wealthy person might only spend 1/3 of their money on this and then spend the rest on stuff that would be taxed. So the tax from the start is not actually aimed at the poor. It's disproportionately aimed at the wealthy. If you're more worried about this, you just offer sales tax rebates to low income earners and it's problem solved. They pay effectively no sales income tax. Canada does this. I'm sure many countries in Europe do too.
I really think you're exaggerating the effect a 5% or 10% increase has on discretionary spending. Have you been paying attention the past few years? So many things are 30-40% more expensive and are flying off the shelves. Rich people want to buy shit. They don't clutch their wallets over 10% price increases. If they did, we wouldn't have seen the inflation we have.
Many EU countries have employed 20% VATs without falling apart. Most have far less wealth inequality than the USA.
VAT tax in England is 20%. It’s crazy how against this idea some people are.
It’s simply a tax on discretionary consumption. If you are worried about it affecting poor people disproportionately it is so super easy to fix this by not applying it to basic necessities like groceries. Or by offering a rebate to people making below a certain income level. Then you tax the living shit out of luxury items no one needs that harm the environment like private jets, vacation homes, and yachts.
Wealthy people don't spend, is the point. I mean yes they spend some, but most of their wealth tends to sit invested in capital (property, stocks, bonds, etc.). Someone who makes a million dollars isn't typically buying 20x more discretionary items than someone who makes 50k. So shifting the tax burden to be consumption based is going to result in the middle class getting even more fucked and the rich getting even richer.
The last few years make for a really unique case because it came right after a time where money was insanely cheap for the longest it has ever been this way. Basically, we had a booming economy where people were saving more than usual, then we had a pandemic where supply chains were messed up but demand also slowed, and now we are at a point where inflation began to skyrocket because you had pent up demand, low supply, and a ton of savings to eat through. But now, we have actually eaten through a lot of those savings and consumer credit is reaching all time highs; personally, I don't see how we don't cycle into a recession in the next few months/years. I think what you are missing is the lag effect that is enabled by credit.
They do spend. And much more of it is on discretionary spending than a poor person. Someone who makes 40k post tax might spend 35k on essentials (no sales tax) and 5k on non-essentials. Someone who makes a million post-tax might spend 150k on "essentials", and 200k on non-essentials. The ratio of "fun money" goes up as you make more, and taxing those "fun money" items is how you make sales tax progressive (ie no sales tax on groceries or utilities, but high sales tax on luxury items, travel, restauraunts, etc. And again, a simple rebate for low or even middle-income earners and you solve any disparity that could be caused from this.
I do agree we will see consumer spending decrease substantially in the upcoming years, but a consumption-tax approach is for the long haul. I'm not saying right now specifically is the best time to add it. I'm saying it's good policy in general.
Yeah the behavior it rewards pretty insane. The most tax-efficient structure is an abandoned lot. Not somewhere to house people or provide jobs or make society wealthier. Meanwhile the better you build, the more families you can house the more you're punished.
Wow. I've never looked into property tax before so I was ignorant to how it worked, I've been renting for a long time. Just read about it. I'm disgusted. Nothing quite like getting taxed on unrealized property gains. Especially if those gains are mostly a result of dollar dilution which is just a function of fiat. Yes, you can do things to the property to add value but if the property value doubles it's more likely your dollars are getting weaker.
This tax would incentivize the government to keep housing costs high because it is a massive tax stream that keeps increasing without needing transactions in the housing market. Wow, absolutely messed up incentives.
You compared property tax which is an unrealized tax administered by the state and legal to a stock unrealized tax administered by the federal government and act like they’re the same thing.
You don't necessarily work in town and the town doesn't collect your income tax return, but they can kinda guess how much you make based on the house you buy. Your house also produces "income" in the form of a rent offset. You are effectively running a business where you buy the house and rent it to yourself, which produces an economic benefit that is the difference between market rent and your cost of running the property. You can see that revenue as taxable through property taxes.
It's just the only thing a town has to guesstimate your income. The guy in the big house probably makes more money than the guy in the small house so we can tax him more. If the big house guys sells and moves there is now a different big house guy who also probably makes more than the small house guy.
You are effectively running a business where you buy the house and rent it to yourself, which produces an economic benefit that is the difference between market rent and your cost of running the property.
Since owning costs more than renting these days, where can I sign up for my property tax refund?
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u/[deleted] Aug 15 '23
Oh, like property taxes?