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What are your opinions on the only tax being a 10% sales tax in consumer goods sold, groceries and such? No income tax, no property tax, etc.
Asking because I am absolutely not an economist and have no idea how viable this is on the macro level. I've always stayed out of large-scale economic talks because it's all way over my head.
Yes, I know, "taxation is theft." I thought that only applied to the unjust ones, like the above income and property taxes. The idea here is the oft-repeated patriot phrase "Tax consumption, not production."
I have my own ranking of taxing styles, but the most important takeaway is that the size and scope of the government needs to be severely downsized so that a low tax rate of whatever chosen style will be enough to provide for legitimate government functions such as law and order and the management of natural resources and natural monopolies. Individually consumed abstract service industries such as education, health care, and charity should be voluntarily traded for on the free market and should have nothing to do with taxing and government spending. The force of law is potentially violent and should not be applied frivolously to personal economic decisions. Leftists are far too cavalier with enforcing their economic and social engineering schemes by abusing the severe force of law and by arbitrarily choosing winners and losers in what should’ve been politically neutral markets.
Anyway: my tax rankings:
The nationalist’s escape from impolitely taxing his countrymen is to shift the burden to foreigners, in the form of tariffs, import taxes, and trade protections. The downside is that it can inspire some inefficiencies in the market such as making inferior domestic goods unnaturally competitive, but that’s a relatively small problem compared to the great boon of liberating the labor of all of one’s countrymen.
If you don’t want to go the route of taxing foreigners, the form of taxing one’s own countrymen that I find least offensive is taxes on exclusive access to natural resources. These might be thought of more as fees for using nature. To exclude others from using a part of nature that I didn’t create, I should compensate the public fund that goes to serving the common good. If I want to take fuel or minerals out of the ground, I should pay a fee per unit. If I want to build a structure that would prevent other people from using the ground it’s built on, I should pay a land value tax. It’s different from property tax because it only counts the land value, not the building value, because the building value includes the labor that went into building it, and taxes on labor are immoral. I’ve brainstormed a way to spread natural resource value to many different citizens by progressively increasing the tax on additional land units: make an individual’s first unit of land very affordable, but the second more onerous and the third even more so, etc. That way, hoarders such as Ted Turner and Bill Gates would have to pay outrageous rates for their one hundred thousandth acre of farmland that would be very cheap to a person who just wanted it as his first and only acre of land. This would incentivize the hoarder barons to divest and spread the wealth. There could be established group trusts where in return for using your name on the land contract and your first-property low price benefit, the barons using economies of scale would pay you for your land as if you were subletting it to them. It would be like a corporate sponsored citizens’ dividend. There’s more to be said about natural resource taxation, but that’s enough for now.
Next least offensive are consumption taxes/ sales taxes. Keynesians like Paul Krugman are overly obsessed with certain econometrics such as aggregate demand and they point out that consumption taxes stifle demand. I concede their point to some extent but I’m not as beholden to maximizing aggregate demand. Letting demand shrink a little bit is more acceptable than taxing people’s labor.
The most offensive are the various back-end taxes on profitability and labor. Unlike paying up front for natural resources and then using them as efficiently as possible for the optimal combination of conservationism and profitability, I call these other taxes “back-end” because they want to see how profitable you are first before financially punishing you for being efficient. Just the concept of paying to work, paying for your own labor, and paying more for earning more, is absurd. The income tax legislation of 1913 must’ve been accompanied by a mass formation psychosis of its time.
Great, well written, thoughtful response. Thank you.
Home run post. Brought up a bit I hadn't considered before. 👍
Thanks bud. What’s the bit you hadn’t considered? The progressively increasing land value tax rates for additional units of land? That idea might scare the crap out of the land hoarders.
Personally, I think a sales tax would be acceptable, but with exclusions for things like produce, water, and other such essentials. 10% might be on the too high end though, for my tastes.
The best idea would be, imo, a transaction tax. Not a sales tax, but rather a tax on all transactions, which would include sales transactions, but others, too. 10% too high, I think. Our current systems have all been corrupted cabal money lender systems, so much money is needed by govt. But in an ideal system, govtr would be much, much smaller, and people would both take care of themselves and others.
The advantage of this sort of thing is that ALL participants in the economy contribute equally. Neither the poor or the rich are advantaged. The man who is frugal, grows his own things and is self-sustaining can then pay much less tax than those who utilize the goods and services of others. Including institutions, etc.
So there is an incentive there to be responsible and self-sustaining, which currently doesn't really exist due to myriad other forms of taxes. Property tax, capital gains tax, etc.
The Australia One Party has a tax policy objective of only one tax existing: a 2% expenditure (aka transaction) tax. I like that idea very much.
https://australiaoneparty.com/policies-summary/
Would a transaction include things like making payments to a loan account?
Not sure. I think not, because if you are simply repaying a loan, there is no exchange of goods or services.
Perhaps 'transaction' tax is the wrong expression. A1 calls their policy an expenditure tax. So I think that would be when you expend money to purchase something - anything and everything.