Added another alternative to income tax

[PaulJRobinson]

No description provided.

[philipjohn]

Instant 👎 from me I'm afraid.

Problems I see are;

1. Echoing my justification for a living wage policy, it is nonsensical for a Government to say on one hand that a person needs at least X in order to live decently, but then take then under that level through taxation. Consumption tax would do just that.
2. "Instead, taxpayers could hand over directly to the government a slice of their total spending" which would presumably require everyone to submit a self-assessment each year. Unfortunately, that means a huge swathe of people who are naturally crap at managing finances will end up in deep doodaa.
3. Those with the means to do so (the very richest) would very quickly find a way to avoid a consumption taxing regime. They'd find another way to buy their mansions, yachts and property empires, denying the treasury millions.
4. From the article "People should be taxed on what they spend, for that is in effect what they take out of society" makes absolutely no sense to me at all. Buying products and services is the very core of a capitalist system, no? Therefore, penalising people (through taxation) for buying things, undermines that whole system.
5. "least objectionable way of taxing inheritance" Income is the means by which we feed, cloth and shelter ourselves, it is not "inheritance" - we earn it and require it to live.
6. "Earnings would be paid tax-free into a savings pot, where the money could be kept indefinitely. Tax would be imposed only when cash was taken out." Completely discouraging spending, which will wreak havoc with businesses, especially retail.
7. "Most people would be likely to save when their income was high and withdraw cash when their income was low." and so a tax on withdrawals would hit people at the worst possible time.

Please tell me this John Kay guy isn't advising anyone in any political party....

[PaulJRobinson]

Don't know. Haven't heard of him before. TBH I was really just putting it forward because it was quite a novel idea I'd never even considered before, rather than it having real merit. It's good to thrash about the crazy stuff now and again.

[philipjohn]

I did wonder ;)

[Floppy]

👎 from me too. @philipjohn has put it better, but as the poor spend proportionally more of their income on stuff than the rich do, this is inherently regressive.

However, proposing these kinds of ideas as a challenge to our thinking is a good one. Keep it up :)

[frankieroberto]

This is a good conversation to have, but I'm wary of having too many 'investigate feasibility of...' policies – instead perhaps the investigation should happen through these discussions?

I can see the benefit to taxing accumulated wealth, but if this was the only tax, wouldn't that just encourage rich people to find clever ways of spending money on luxuries so as to avoid tax?

[Floppy]

Long dead, and would need rewriting anyway if it was to be considered.

[Floppy]

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