Ban personal income taxes

[petros]

There's no "already" about it, it's been going on for a long time. PST and GST are consumption taxes, and because lower income people spend a greater proportion of their income on consumption and save less than higher income people, consumption taxes tend to be pretty regressive. It's possible in theory to set up a progressive consumption tax, but it's extraordinarily complex. Economic theory doesn't often seem to have much to do with reality. I've seen analyses that suggest that if a consumption tax was to replace all other forms of taxation, to generate the same level of revenue the rate would have to be about 60%. I shudder to think how taxpayers would react to finding, after basing all their finance and investment and retirement decisions on a varied tax regime like we currently have, with taxes on income and property and investments and whatnot, that suddenly everything they have to buy costs 60% more. How could we possibly phase in something like that? To be fair, we'd have to apply different levels of consumption taxes to people of different ages and incomes until everybody who'd based their decisions on the old regime had died, an impossibly complex administrative task. It'll never happen, and it's a dumb idea.

I was thinking along the lines of carbon useage ... But I hear you on the need for the tax to be set at 60% with current deficits.

 

[gopher]

''The real problem is the inability of governments at all levels to control their urge to spend your money''

Eliminate the income tax and there will be no more foreign wars as there will not be any other means to enable the military industrial complex to generate profits from the money it usually gets from the government.