We Need VAT and UBI(wilsoniumite.com) |
We Need VAT and UBI(wilsoniumite.com) |
[1] https://www.oecd.org/en/publications/reassessing-the-regress...
> even a roughly proportional VAT can still have significant equity implications for the poor – potentially pushing some households into poverty."
from your page:
> Elastic goods, i.e luxuries, shed demand as prices rise whilst inelastic goods like bread do not. This has the effect of refocusing the economy away from luxuries and toward inelastic necessities, which effectively makes VAT progressive, not regressive.
As someone who lives with a VAT rate of 20% on most goods (and 5% on other with 0% on most foods) it doesn't meaningfully direct away from luxury goods. Its just priced into things (and if your a build er o cash in hand, then you can make 20% extra)
Personally I would rather we look at "council houses" and making them much more universal. As that would be cheaper than UBI but have some of the same benefits.
We should just get rid of VAT and replace the lost tax revenue with something that's more equitable, such as a proper wealth tax. It's not like wealth goes away with a UBI.
Put a tax on the value of land instead of the property improvements. Then you'll start to see some wealth flow away from the UHNWIs.
Now, land value taxes obviously have their place in the gamut of different taxes to levy, so I don't wish to badmouth them too much. But as a consumption tax, VAT also does have its place. Sure, they are absolutely regressive, but this also helps them to act more like Pigovian taxes, since they can be used to make certain categories of goods and services more expensive. And so if one can afford to pay the value of the negative externalities, why not. And hopefully it can then steer people towards better choices.
As a counterexample, tobacco taxation is less effective for reducing smoking than alternative policies [1]. So, yes, we can hope that higher taxes help people make better choices. Or we can implement better policies that are known to be more effective.
[1]: https://web.archive.org/web/20250323131704/https://tobacco.u...
Luxury tax and tax on secondary homes would probably be better.
https://landeconomics.org/reports/spokane-report
I think what you're missing is that land in the wealthiest parts of town is worth exponentially more than land out in the suburbs
Some recent studies have shown that a properly implemented LVT avoids harming most homeowners, in fact you may come out ahead if other taxes are eliminated. (LVT alone is adequate to fund government spending and entitlements.) The homeowners who will typically feel a pinch are those who have inherited very large estates which don’t generate income. They may need to sell or develop part of their estate.
Land speculators, however, will be in serious trouble.
I was expecting they would adress the elephant in the room : the price of the room to fit the elephant (as, in "rents").
There are form of subsidies in France called "APL" (nothing to do with the programming language - the form you have to fill in order to request the subsidy is waaay more cryptict.)
The tacit agreement in the flat renting business, is that your rent will be "whatever you earn as subsidy from the government, plus however we can afford to ask." So it's still a free market where homeowners get to set the price - because they own a scarce asset that is in high demand, probably because they wisely chose their parents and year or birth.
It's just that the subsidy artificially increase the floor price.
I've always wondered how a government implementing UBI would prevent such an effect on the goods that are the most scarce, unliquid, and high demand / low supply.
> I’m aware of the irony of this statement. Everything is political.
This is a horrible cop-out. Sure, everything is political to an extent.
The subject of the article though, taxes, is political in nature. There is no way to discuss taxes outside of politics. Taxes are one of the most political subjects there can ever be, and trying to untangle them just means your argument will have exactly zero relation to reality.
Furthermore, as others in the comment section have noted, VAT is an extremely regressive tax. The poor spend all their money. The rich spend close to none (and arguably will spend exactly 0 of their own UBI), and are the ones who benefit the most from consumption.
The poor will pay for their own UBI, plus for the UBI of the rich, plus for the products and services they have to consume which as noted will make the rich richer.
Your proposed scheme will expand inequality. Like I said, none of this is or can ever be apolitical.
The government is implicit in a lot of this when it should be doing stuff like breaking up big companies to curtail it. UBI and VAT would just exacerbate the actual problem because it would grow the government and the government would eventually just get captured again (or stay captured) and be put to work ensuring the wealth keeps flowing to a select few.
Politician A will promise "no VAT on bread" to get elected. The next guy will promise "no VAT on essentials". The next guy will promise "no UBI for the rich". And so on.
And you end up with the next politician dismantling the whole system as unfair.
But VAT is a dumb tax anyway. Anybody with high enough wealth can evade it, you just have to found a company that will pay for your computer, car and probably other stuff. I'm pretty sure I could pay for a 3d printer without paying any VAT. If I was devious, I would start a 'sailing course' company and buy my wings/sails/foil through it, while teaching once a year or so.
I'm guessing eventually we'll work out that 'fresh food' shouldn't be taxed, and the processed food should be. It's here we can work out that certain chemicals, processes, facilities, etc, are actually what should be taxed at source, and through doing so, we can save the world billions in accountancy bills.
I've read that it costs small companies around 2% of turnover to be VAT compliant. In the modern age, this is absolutely insane.
We have the ability to work out how much businesses spend to do a job. We can boil that into a transaction or sales tax, which - with digital payments - can practically be automated at source. (if people pay in cash, that assumes a local service being supported, so who cares if its taxless? it balances out the unethical practices associated with hugebusinesses).
There's also no mention of externality taxation. If we're going to have socialised services, surely consumption taxes need to be raised in parallel to how much goods/services impact society?
It's also dubious that a VAT is intrinsically regressive, a VAT is essentially a tax on business revenue. Most items for which the price is set by demand will face downward pricing pressure a force that ultimately results in the VAT contracting profitability and not being regressive.
The issue with the argument that consumption based taxes like a VAT or tariffs are regressive is that it assumes an altruistic pricing mode. A state which is very far from reality. If our multinational corporate conglomerate market dominators could raise prices to absorb all taxes then their current pricing is too low. A case I don't think many would make in the current age of consistent record breaking profits.
The thing to remember is the corporate goal is that prices are set to be the maximum the market will bear.
> This is not a political post
Why is this rage bait on the front page of HN?
https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...
Given you’ve (ironically or not) opened with a threat to murder anyone who makes this claim, via “I’m tired of being calm about this. If you so much as whisper ‘that’s socialist’ […] I will beat you to death with a sickle tied to a demand curve.”:
You may try to beat people to death with your precious sickle. In the civilized world, you’ll die from a stream of (ideally lead-free, but when people are try to kill you being environmentally friendly is optional) high speed projectiles.
You propose redistribution intentionally and explicitly, then claim, “redistribution isn’t the point”. Yes. It is, and we all know it.
You lie that it won’t cause massive inflation to just print money and then tax it, before going on to admit, “Whoever calculates the national CPI will have a tiny bit of extra work to do. It also is inflation in terms of eroding savings and assets.” …so yes, it will be inflation, but you just need someone to do the lying for you via a bit of “extra work”.
You claim this will solve the stagnation of Western economies, the “far right”, nationalism, housing, and “consumption as a component of economic activity”. Will it also solve world peace and hunger, or do you want to stop while you’re behind?
Just admit what you want directly AND stop lying in the process.
What a nightmarish mind and prison for the soul. What a waste of our precious time on Earth.
It's bizarre to think people who can change the tax brackets via dark money are "paying the most".
Sure man, if I pay zero because I'm homeless and you pay a dollar; wow! you're paying the most taxes. Congrats on your logical fallacy.
It is slightly redistributive, yes, but really only slightly. Its hard to design it to not be redistributive, but if you really want to do that then you raise VAT and lower income taxes instead of funding a UBI. I wrote about that later in the piece.
My sister cooked on a yacht for a company that lost money every year by selling their services at loss, before selling its assets to another company (who then hired her). The company did not pay VAT when they buy the yacht, the only moment the owners pay VAT is when they buy the yacht company 'services' (which are basically free).
> Nevertheless, any VAT increases, including VAT base broadening measures that impact the poor, should be accompanied by compensation measures for poorer households, such as targeted tax credits or benefit payments.
Which is essentially what I propose through UBI, I just have broader scope.
This is meaningless, when there's so many fewer reach people than poor.
I don't know how people have the guts to pretend equality, but not in taxation. One human, one vote, one dollar.
Considering they basically own and operate the uniparty and its media apparatus, they have enormous influence over the entire electoral process and peoples' thoughts to a degree that makes any notions of 'democracy' illusory at best.
It was bad for decades, and then corporation-controlled social media brought the corruption to new heights.
You may be opposed to all taxes, but if you acknowledge the need for some kind of tax, it at least has some kind of rational and seemingly fair justification.
Yes, I am fine with taxes, but not with any type of tax, not property taxes (it is bought with money already taxed) and not with taxes as punishment or taxes as political games. I am opposed to taxes as a purpose, I am for taxes as a means to pay for some universal services that you cannot pay by consumption.
This is why there’s so many complicated rules around land, it doesn’t fit neatly into a defined yours-or-mine category.
Georgism allows exclusive use of land—ideally without restriction unless it affects neighbors through pollution—it just asks that landowners pay for that exclusivity on an ongoing basis. If they no longer wish to pay, or no longer can pay, then the market can allocate that land to someone who will pay. It’s a pro-development system that calls for increasingly limited land to be put to economic use, unless that land just isn’t very useful/valuable.
I just think it’s better than other forms of taxation. I don’t see why I should need to report my income or employment to the government, nor do I see why I should be taxed on my labor. To me this is much less justifiable (and much more invasive) than just taxing land.
Why do you “own” land? Who first owned it to have the right to sell it? Usually land ownership claims eventually go back to violent conquest. Why did the conqueror who stole it have the right to sell it? Why should we treat the claims that descended from this as inviolate?