| > But who spent a higher percentage of their income? Everybody knows. That's because we tax income. And income, unlike spending is easier to muddle. You can always fabricate a loss or at least a temporary loss to avoid paying taxes on your income. It's harder to hide spending. > And who had vastly more opportunity to spend that in a place outside of that sales tax jurisdiction? It's just as easy today to move your profits to another country if you are rich. If you tax spending, you can just tax money transfers to other countries as spending. Rich can fly wherever they like but they still had to pay taxes on the plane they bought, fuel they put in and all the money they spent on their trip.They could buy crypto, but guess what, on crypto purchase, also a spending tax. They can even move to live in another country till they die, but still their money transfered outside of their home country into their new one, taxed on exit. You brought the money into the country because you are in the business of exports? Great, here's a tax credit. You may deduct it from the tax you pay on your excursions abroad. The problem is not what is the moral thing to tax. The problem is how to do it efficiently with no loopholes without affecting desirable behaviors negatively and promoting undesirable ones. Taxing spending would also help with vast empires that cosist of inherited money. Income was already done, century ago so there's nothing to tax. If you try to tax wealth, so many people would equate it to theft. But if you tax spending ... |
Or we just finally actually tax inherited wealth like other kinds of income instead of giving wealthy many many millions of handouts and tax subsidies.
> with no loopholes
We've both shared examples of lots of ways one can have loopholes on spending money. If the standard is to find a way of "no loopholes", well, spending money outside of the tax jurisdiction away from the knowledge of the tax jurisdiction is a loophole. One wealthier people will have a far easier time exploiting than the poor. Expecting the wealthy are going to report their sales taxes on goods purchased overseas is as hopeful as back in the day states hoping people would report their online purchases. We both agree there's countless ways to obscure your income, if they can obscure their income why is it now impossible for them to obscure their purchases?
> You brought the money into the country because you are in the business of exports? Great, here's a tax credit. You may deduct it from the tax you pay on your excursions abroad.
So those who make money on exports pay even lower tax rates than those working domestically, by design? And who in that "business of exports" actually gets that benefit? The shift worker in the factory making the widgets, the marketing director making the campaign for the widget overseas, the salesperson making the actual sale to the foreign distributor, or the owner of the corporation? Me thinks that benefit isn't going to the shift worker or the marketing person or the salesperson. Cool, even more handouts for the wealthy here. Great ideas. They'll get a tax break on their expensive foreign vacation while us plebs here pay full tax rates.
I'm not trying to make the argument that what we have today is good. There's so much wrong with it. But thinking that throwing it all away and just taxing spending is somehow itself a good and just way of doing it also doesn't make much sense to me. Having poorer people pay more effective tax rates than wealthier people doesn't strike me as fair.