Why not finance helping quadriplegics from increased VAT?
If it comes to that, why not finance helping quadriplegics from charity?
If it comes to that, why not finance helping quadriplegics from charity?
Because VAT, beside being a very effective tax (it's the biggest source of income of most countries), is the most unfair one.
Say a country have a 20% VAT
Low income household need to use the entirety of their income to survive (food, housing, etc). So effectively 20% of their income is collected as VAT.
Now a upper class household, let's say they save 25% of their income each month as retirement plans etc, and spend the rest.
They've been effectively taxed at 20% of 75% of they income, so their effective VAT rate was 15%.
While you often see very high income people advocate for flat rate tax instead of progressive tax, none of them have the nerve to propose a reversed progressive tax like VAT is, where poor people pay proportionally more than rich people.
at the end, poor people would become less poor, but only by screwing with system, and only very few of them. you can put some limits on who can buy what, but this will inevitably create a massive bureaucratic overhead, meaning another set of useless government jobs that create no added value, but draw cash steadily from treasury.
I've always felt your definition of "most unfair" to be a great fallacy. Yes poor people pay a higher percentage of their income. They also receive more in benefits than they give and the flat tax ensures the rich pay their share. The more complicated you make the system the more it will benefit the rich.
VAT is a net benefit for the poor. Making the whole system work that way, particularly in the face of globalization, is the best course of action. To declare it unfair is to cut off your nose to spite your face. In my opinion.
I don't see how a wealth tax is a good idea at all. If you could recommend a good article that argues why it's good and how it would work I'd love to read it.
You want your tax system to reward long term thinking, not punish it.
You're looking at the wrong end of the telescope. It's really not that difficult to look at a tax table and cross-reference your income, so a flat tax is a very minor improvement.
Where every tax system gets tripped up is in determining what qualifies as income. People who manage to avoid taxes aren't somehow lowering their rates; they're getting inflows of money excluded from the "income" accounting box.
It's not an easy problem to deal with, either - states have been trying for centuries. Most of the write-offs individuals and corporations take are perfectly reasonable for some situations and very much abused in others. As you try to prevent abuse you end up with a tax code that's so complicated there are more ambiguous "gray areas" for people to take advantage.
That increase can be used to help quadriplegics.
You can hold that view - but recognize that it is a specific view, not an essential definition of fairness.