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26 sats \ 3 replies \ @denlillaapan 28 Feb \ on: A Few Thoughts About Replacing the IRS with Excise Taxes and Tariffs econ
My initial reasons for excitement were the obvious ones: consumption based taxes have better incentives than production based taxes (I know tax incidence muddies the waters, but this is still true) and consumption taxes are more avoidable than the slew of individual and corporate taxes currently in place.
...but also more regressive ("oppressive," I wanted to write...), penalizing the poor over the rich.
One second order benefit occurred to me immediately: Without taxes on income/payroll/inheritance/capital gains/etc. the state loses most of its rational for its rampant invasions of our financial privacy. Since most businesses are already subjected to the invasion of their financial privacy (through state and local sales taxes), this is a huge net positive. YES! This, more than any fiscal/economic benefit, is worth doing it for
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24 sats \ 2 replies \ @Undisciplined OP 28 Feb
I should have put it in the post, because people keep bringing up regressivity.
  1. Payroll tax is also regressive
  2. The plan includes a rebate to offset new sales taxes on basic necessities.
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25 sats \ 1 reply \ @denlillaapan 28 Feb
hm... payroll tax is only regressive bc there's a (pretty high) top-cap, no?
with 2., then I guess the total effect is neutral/non-regressive.
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14 sats \ 0 replies \ @Undisciplined OP 28 Feb
Sort of yes on the first point. There are some middle income jobs with benefits setups that don't have to pay as much of the payroll tax as entry-level workers.
The rebate makes it progressive-ish. Up to a point, lower income people will be effectively paying less, but at some point it will switch to wealthier people paying lower rates because they spend a lower percentage.
Like everything, it will be structured to bone normal workers the worst.
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