0
$\begingroup$

I been recently pondering what might be the best tax system. I kept in mind that this tax system should have advantages for state, companies and for all people. Not people only.

What I came up with is that people should only pay taxes on what they spend rather then earn. The reason are:

  • People are in encouraged to save money. This I view as good because the money that is saved in a bank will be invest by the bank them selves. Also People will Have the chance to invest.
  • If people save money it is saver just encase of an economic collapse. This intern will make the people who saved much better of. As the economic fail everything goes on sale thus the people who saved can make better investments to temporally disabled economies.
  • Also this is fair for all classes as the more you spend the more taxes you pay. The poor can buy much thus they have lower taxes.

At what rate the expenditure should be at I have no idea. I was thinking it should be at the same rate. As it will be fare for all businesses.

I also added on that companies should no be taxed at all. This is so:

  • Cost of products goes down.
  • fair for all businesses everyone taxed the same (which happens to be none). Startup and corporations are on the same playing field.
  • Companies are encouraged to move to your country. Thus hire employment rate.

Disadvantageous of this is.

  • Potentially too much immigration due to Companies moving in. Thus forming an unstable culture that can ruin a county. for example company culture doesn't fit with the locals, thus creating friction as it might be viewed as racism.
  • People can buy stuff true there companies thus avoiding tax.
  • Denser population as people move in with there Companies. in some areas this might become too much.

Other Effects that I think might happen.

  • More people can afford buying houses. Making housing more scarce. Thus housing prices goes up. Thus more tax to the county as people are spending more. All this making a healthy cycle of people investing and the county benefiting. This might not work for the poor.

I feel that I might have some blind spots making this plan not so great.

Can you please give my your feedback.

$\endgroup$
  • 1
    $\begingroup$ I'm afraid that your question, as you've posted it, might not yield much helpful insight. There's a massive literature focusing specifically on the problem of "optimal taxation," which considers points that you've brought up, along with a host of others, If you narrowed your question down substantially, and focused much more on a couple areas (such as "why are corporations taxed at all?" or "Are consumption taxes more economically efficient" as broad topics) the responses might be more useful and insightful. That said, it should also be pointed out that often times, when creating tax schemes>> $\endgroup$ – AndrewC Jul 29 '18 at 13:55
  • $\begingroup$ >>the phrase "the devil is in the details" applies. If you were actually considering an alternative tax structure, and were interested in how well it would practically work, you'd need to consider broadly what some of these "details" would be, such as how much you'd have to raise sales taxes to compensate for the loss in income and corporate tax revenue, how you're going to define financial instruments, etc. Finally, I'd point out that at least a few of your potential downsides that you mention might be severe enough to topple the entire tax scheme itself (specifically, if I could found a>>> $\endgroup$ – AndrewC Jul 29 '18 at 14:01
  • $\begingroup$ >>>company, make all of my daily purchases through that, and then "pay" myself from that company using all of the purchased goods, the total tax revenue could drop to zero. All of that said, it's very much an interesting question (how to best tax a society) and worthwhile project to consider, and I encourage you to continue! $\endgroup$ – AndrewC Jul 29 '18 at 14:03
  • $\begingroup$ I agree with you: Taxation should center on consumption rather than on income. But others might vote down on your inquiry as too broad, primarily opinion-based, or asked elsewhere. In the middle portion of this answer I share my conjecture that the ulterior motive for income taxes is to preserve the status quo, precluding --under pretexts of social justice and welfare state-- much of the socio-economic mobility that could be attained by a person's own merits. $\endgroup$ – Iñaki Viggers Jul 29 '18 at 14:24
  • $\begingroup$ Thank you Andrew. I understand you and there is a lot to think about. I think it best if I read literature on Optimal taxation and come back with more specific questions. $\endgroup$ – Zak Micallef Jul 29 '18 at 14:26

Your Answer

By clicking "Post Your Answer", you acknowledge that you have read our updated terms of service, privacy policy and cookie policy, and that your continued use of the website is subject to these policies.

Browse other questions tagged or ask your own question.