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PaperclipPerfector  7mo ago (text post)   27626 thread views

Culture War Roundup for the week of April 15, 2024

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And then gets hits by sales taxes anyway when he spends his money in the future.

I have occasionally mused that a truly-progressive sales tax could be interesting: tax total expenditures up to, say, the median cost of living at one rate, and marginal expenditures above at a higher rate. This would probably need some allowance for amortization on bigger purchases. The idea being to tax the wealth when it's spent, and intentionally incentivising capital investments rather than conspicuous expenditures.

But it's a very wonkish policy proposal that would be hard to sell to the broader public, I think. And probably has quite a few details that would need ironing out.

It seems like a progressive sales would inherently require tying your identity to every purchase, which seems like a huge inconvenience and a tough sell from a privacy perspective.

Flat sales tax with a rebate partially solves it, although in practice you would need a horrible VAT system to stop people living off their employer tax-free (like the tech companies already do to some extent)

Here is another proposal: https://www.themoneyillusion.com/tax-luxury-not-wealth-or-income/

Possibly. I think you might be able to track net cash outflows, rather than purchases directly, to cover most of it, but that admittedly only works for people that use banks and would have trouble with people who get paid and pay in primarily cash. But the existing income tax system has those problems too.

You could also tax different products at different rates, depending on the income range that purchases them. Used clothes, lower rate; Teslas, higher rate; organic produce, higher rate; frozen veggies, lower rate. In theory you could kind of approximate the same effect. The biggest issue would be all the jockeying different industries would go for to be classified into the lower rate (why, of course this Hermes bag is purchased mostly by lower income people!)

I guess a corresponding benefit could be dramatically reducing the overhead of a small business. But only in a fantasy world where all state taxes followed suit.

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