[bingoboingo33]

The correct solution is to eliminate income-based taxes altogether, be they corporate, individual, derived from regular wages or derived from capital gains, etc ... and stick to a flat consumption based tax. But we're so deep down the rabbit-hole of our current system, we can't even imagine doing that.

Without going to that level of simplicity, it's worth noting that some countries have done away with capital gains altogether and are doing perfectly well socially. That would be a perfect first step.

[ThrustVectoring]

If we're doing radical changes to the tax structure, land-value taxes have far better side-effects than consumption taxes.

[rpedela]

If we are going to massively simplify taxes, then it needs to be done on the richest rather than the poor like a consumption tax does. By rich, I don't necessarily mean rich individuals. The richest entities in society are businesses and they benefit the most when you or I have money in our pockets.

If you think about it, the most common federal tax on individuals or families, income wage taxes, is in fact a revenue tax on businesses just like the payroll tax. A business has to pay an employee more to cover that employee's income and payroll taxes.

If we are going to replace all taxes with one tax, I would like to see a simple, flat business revenue tax. This has a few benefits. First, businesses already pay revenue taxes and individuals don't have to worry about taxes. Companies like Amazon cannot behave like a non-profit to avoid taxes. Individuals will have more money in their pockets to spend which helps business make more money. We could probably excempt small businesses and/or startups and still generate enough tax revenue. A revenue tax would also double as a consumption tax except it is only the richest that have to pay it.

[bingoboingo33]

"If we are going to massively simplify taxes, then it needs to be done on the richest"

Why? This is a built-in assumption most people seem to be operating with and I've never understood the rationale that the rich should pay more.

Does a rich person wear roads out more than a poor one? And if they do, wouldn't it be better if they paid for how much they wear the road down? As in: a percentages of miles driven on it? As in: a consumption-based tax?

Anyhow, even if you decide to work with that flawed premise, to me, if we're going to tax revenue, then "fair" translate to a very simple mathematical concept: fixed-rate.

Everyone pays 10% tax on their income. This way, the "rich" pay more, and the "poor" pay less. Because 10% of 1M is 100k and 10% of 100k is 10k.

Fairness handled.

[zacharycohn]

If you pay 10% on $100,000 a year, you have 90,000 left over. Plenty of money to live comfortably and have your needs met.

If you pay 10% on $20,000, you have $18,000. It was already hard to live on 20k, living on 18k and having your needs met is even harder.

Your examples reveal your bias. Most people don't make $100,000. And it's the "most people" that you would impact hardest with the flat tax scheme.

[briandear]

If you looked at the Ted Cruz tax plan from the 2016 campaign, he advocated for a 10% tax on individuals with a high standard dedication and a 16% tax on business income. Taxpayers making under $50k would have paid zero under his plan.

It is possible to do a flat tax while protecting the poor.

But, as Milton Friedman said, the tax code is complex for a reason — it gives politicians a means to exert power and reward or punish. With a simple tax code, the incentive to donate to campaigns would be reduced. The Democrat and Republican establishment both oppose simplifying the tax code because they would be killing the golden geese that keep getting them re-elected. It’s no accident that the tax code changes literally every year. Politicians are busy rewarding or punishing constituencies.

[zacharycohn]

$50k -> $45k is still a much bigger impact than $1M to $900k.

[zimablue]

It's fundamentally because:

a) most people are along for the ride that it's a moral imperative to keep all of the population happy b) the more money you have, the easier it is to make money. If you don't even that out at all you end up in a feudal society where some dude owns all the land, air, water and you're effectively his slave. Which is broadly the direction America has been going to for the last (30?) years

Fairness is very motivating for people but I don't think it's how you should base your society, I don't really think there's such a thing as fairness as a useful concept.

The real fix is a wealth tax but that is hated by both the old and the rich (look at how mansion tax policy was received in the UK). It's also kind of harder to measure than income.

[rpedela]

If we are talking about fairness, what I described is more fair. 10% of income for a poor person can mean the difference between buying prescription drugs or going without as one example. However a rich person is going to have enough money to buy prescription drugs whether they pay 10% or not. In other words, the poor person is already at a significant financial disadvantage. So not asking them to pay taxes helps level the playing field some.

[conanbatt]

> The richest entities in society are businesses

I can never get this narrative. A business is an organization of people, of investors workers and consumers. You cant offload taxes to an abstract business, you are putting it on one of the groups of people above.

[rpedela]

Yes except that the vast majority of the population are part of the businesses in some manner so if you tax all businesses then you are taxing the whole population (or vast majority). And as I said, personal income taxes on wages are actually a business tax. The requirement to provide workers comp, healthcare is a business tax. Businesses are taxed all the time.

And those groups of people are financially more powerful collectively than individuals which means those groups of people have a responsibility to help pay for society which they benefit directly from such as roads, power cables, etc.

If only one or a very small group "abstract business" was required to pay all the taxes for the entire society, then I would agree with you. However no one is arguing that.

[conanbatt]

> Yes except that the vast majority of the population are part of the businesses in some manner so if you tax all businesses then you are taxing the whole population (or vast majority). And as I said, personal income taxes on wages are actually a business tax. The requirement to provide workers comp, healthcare is a business tax. Businesses are taxed all the time.

There is little merit in name of a tax that it gets to "the majority of people". It can fail equitability super hard because of who pays the economic burden of the tax.

> And those groups of people are financially more powerful collectively than individuals which means those groups of people have a responsibility to help pay for society which they benefit directly from such as roads, power cables, etc.

Sorry, but this is just not economic thinking, not even of the wrong kind. If the burden of a tax is on consumers, your assertion falls hard. If it falls on workers, then you are punishing labor. If it falls on investors you are punishing investment. "Being powerful parts of society" is not an argument for taxation.

[rpedela]

I think you and I fundamentally disagree on what a tax is. You seem to view it as punishment or a burden. I view it as the method for paying for things that help the collective good. Not a punishment but rather a duty for those with the means. If we aren't using taxes to collectively protect society (e.g. military, police, courts), help the less fortunate, etc then why collect them at all? The richer the entity (individual or business), the more means they have and the more they actually benefit from those taxes even if they have to pay them.

EDIT

Just to add, if you agree we need taxation to have functioning society, why wouldn't we get the money from the richest? Why wouldn't we put the burden on the richest? In terms of people inside rich organizations, it is only the already rich, owners and investors, which would feel the burden. Supply and demand will continue to give consumers high quality and low prices. Employees will still get their market-rate wages or minimum wage for low-skill jobs.

[closeparen]

You're responding to a technocratic argument about how to allocate taxes equitably with a moralistic argument that taxes are good. From a meta-debate perspective this is both infuriating and tragically common. Details matter. Incentives matter. "Taxes are actually good" isn't a reason to stop caring about which taxation schemes produce the best outcomes or are more fair.

"Punishment" carries some unnecessary connotation. How about "disincentive." People respond to incentives; good policy exploits this by taxing the things society wants less of. Failing that, it levies taxes that don't depend much on behavior, to avoid undesired distortions.

The argument is not that corporations have some kind of right to their income that's being unfairly abridged. It's that taxing corporations is sloppy: the true cost of the tax falls on consumers, workers, and owners in not-very-deliberate proportions. If you want to put the burden on "the richest," great, so do I. But let's tax those actual people.

[conanbatt]

> think you and I fundamentally disagree on what a tax is. You seem to view it as punishment or a burden. I view it as the method for paying for things that help the collective good. Not a punishment but rather a duty for those with the means. If we aren't using taxes to collectively protect society (e.g. military, police, courts), help the less fortunate, etc then why collect them at all? The richer the entity (individual or business), the more means they have and the more they actually benefit from those taxes even if they have to pay them.

A tax IS a punishment. It is a charge not reciprocated by a service to the person that pays for it. Collective goods dont require individualized sacrifices, just individual collaborations. But okay, we can divert ideologically on that point, but nevertheless any effect of taxation is a cost on the person paying for it, and will have the same effects to him as if the person lost the taxed money into the abyss.

> Just to add, if you agree we need taxation to have functioning society, why wouldn't we get the money from the richest? Why wouldn't we put the burden on the richest? In terms of people inside rich organizations, it is only the already rich, owners and investors, which would feel the burden. Supply and demand will continue to give consumers high quality and low prices. Employees will still get their market-rate wages or minimum wage for low-skill jobs.

I think I've always had a curious thought about the idea of not discriminating minorities, except for the rich, you better discriminate those! If we can agree at least that taxation is the cost of government, why should the cost of government only come from a section of society? A society that achieves to make a part of it responsible for its whole will not thrive in collaboration and cohesiveness. A society where some expect to make a living at the others expense is not a free one.

In economic terms, there are multiple criteria on measuring how good a tax is. There is of course how the burden affects the person itself, but also how efficient it is to levy it, how convenient it is to pay or how predictable it is. Satisfying multiple criteria will not give you much room to tax "the rich".

There are normative arguments as well: just placing a tax on the rich doesnt mean you'll be able to raise that money, as the rich have the highest recourse to escape. Human beings are very hard to corner!

[bluecalm]

Tax consumption, land, pollution and using natural resources. Allow people to get some amount of consumption tax back every month to make the system progressive. Get rid of all income taxes. Make sure there is inflantion as a form of tax on stashed cash as well.

Consumption tax is much harder to gain than income taxes. Corporations pay in the country they sell to so that closed all tax heaven loopholes instantly. Making the system progressive is easy as well, just allow every citizen to bring receipts up to X$ per month to the taxman and get the money back. If you really want you can tax luxury items at higher rate as well.