Japan PM Abe: See no need to raise sales tax beyond 10% for decade
reuters.com
reuters.com
The government can lend as much Yen as they want. The tax hike is something that can help them get inflation, which has been too low for very long.
I think the state tried just every possible thing to reverse currency trends and ease fiscal restraints, but just all failed including an enormous quantitative easing (money printing basically)
Wouldn't that absolutely crater consumer spending? I know if I had to pay 26% sales tax suddenly everything I buy would be from China and ship labeled "personal gift".
High taxation is what makes something like Healthcare so good and eventually cheap for everyone, contrary to the disastrous situation in the US. As a French I'm more than happy to pay 20% VAT if I know it's going to benefit everyone.
Taxation is legal and lawful, and thus is not dishonest.
If you live with your significant other and you agreed on a 50/50 rule for paying rent, would you say they/this relationship is stealing money from you ? That doesn't make any sense.
If you don't want to be taxed then don't live in the society and don't use any of the things it provide: no roads, no healthcare, no police (so if someone actually steals from you you're not entitled to complain because you're not part of the society), no food or water coming from a store... If you don't want to participate to the society, then you don't participate to the society.
Typically no, since you are tribute to:
- your government being able to manage its funds well. Well too bad, they do a piss poor job at it and keep increasing taxes year after year.
- the majority during elections not voting for more government intervention, which would lead to more taxes as well.
Plus, your example with your significant other does not make sense since you do have a contract/agreement. As a citizen no such agreement/contract is ever signed with you: the conditions are imposed and force is used upon you if you refuse to pay taxes.
> If you don't want to participate to the society, then you don't participate to the society.
That still does not make taxation not theft, since you are never asked how much you want to contribute voluntarily for example: you never enter a contract as a willing party. Plus, let's say you don't want to "participate in society", the state will still find you and jail you for not paying taxes even if you decide to live on your own.
If, however, you're saying that there is enough production of, say, cars, for everyone so that we can all have one exactly when we need, I'd see no problem having it shared with others in a way I can't decide (because I know I'm going to be able to have one when I need it). But that's probably because I think there are too many cars already.
Sounds like a tax on production to me.
The hard part is that in theory, healthier, "natural" food (e.g. fresh fruit and vegetable) should not have VAT, but it's just more expensive anyway than cheap processed food that's had "value added" by the process.
Healthier, more "bio" food is more expensive because efficiency is lower and the scale and choice of harvesting means don't allow it to be cultivated at the same rate, so the base price is higher. VAT is not playing any role in making it more or less expensive.
In the end, for the poorer, at least in the likes of the UK, it means they eat less healthily because they need to buy cheaper, processed and less nutritious food that keeps longer.
I don't disagree with anything you're saying in textbook terms, but reality is different.
In the end there will always be something that you need someone else to do and that's fine, it's because as a society we have gone the way of specialized individuals providing for the rest of the society. I do believe however that it doesn't mean you must work to be part of the society, because IMO we should shift towards a universal income. But that's another discussion.
Respectfully, I disagree. It may be a choice somebody made at one point in time, but for the poor it's not a decision they have the luxury to fix. Some can't afford to take a day or several off of work to move, or even to look for somewhere else to live and another job, or they don't put food on the table. Even if they can, without time and money, and a good job, nobody is going to rent a home to them outside of the big city.
Cities like London make it extremely difficult for these people to live, but at the same time make it possible, and even then it's in conditions most would be unhappy to live in, all because someone will give them a space in a room for cash without any credit checks or all of the red-tape that would be required anywhere more laid back; things are possible in the city purely because of volume, and rules are relaxed to keep the pace.
Getting out of being poor in a country with an economy like ours is difficult. Having space to grow food is no good if nobody will let you use it, or if you work such long hours you don't have the time to do it, what about having the energy to do it? poorer people tend to work more physically demanding jobs.
I've seen your textbook system work, in less developed countries where people have the luxury of time and space because their cost of living isn't an overbearing demand and specialisation is lower.
You can't argue we're specialised, then at the same time say everyone should grow their own food, that's the farmer's job.
I'm not sure what the solution is, but finding a way as a society to take some of the strain off of people who are struggling just to feed themselves is a good start.
This seems self-contradictory, how are the taxes insufficient if only most of such countries are in the red?
I know Europeans say they like their free healthcare and social services, but the cost seems to be about 20% extra tax on the average income. That seems unreasonably high to me, even compared to the US system.
You can argue it's sort of an insurance scheme that everyone is forced to be part of. But compared to private health insurances, it's actually very cheap, because _everyone_ is chipping in. So even with much higher tax rates, people of a certain means (say middle class), have a comparable higher disposable income, because our expenses are predictable.
(Note that there still exist unforeseen expenses, but they never reach the levels of some hospital bills in the US seen reported.)
The thing about it is, because it has been there for so long our economy has adjusted to it.
It's completely different to up tax from say 10% to 20% in one fell swoop as it puts a huge burden on anybody not wealthy.
I guess the issue is not so much the rate of tax, but the rate at which it is increased. Wages and living costs need to even out.
In Sweden, they pay 25% VAT, with some reduced rates. In Denmark, it's 25% with no reduced rates. Although used items are VAT free. And speaking as a Dane, I honestly don't have a problem with it. Even though I have to send invoices from time to time, and charge a 25% VAT.
[0] https://tamebay.com/2018/01/new-import-tax-for-chinese-goods...
Sales taxes are regressive taxes. It's stealing out of the pockets of people who are too poor to find time for politics or who are too uneducated to understand that they are being mugged.
If I was an economist with a college degree, I would also support sales tax.
The problem with income tax is that it encourages the richest to run scams where the ROI is "cost of accountant + tax saved < expected tax = do it". If your income exceeds $100,000, it is almost guaranteed to be worth it to hire expensive lawyers.
Then there are the terrible scams like the one I read (which I can't confirm) where startup founders with public companies receive a minimal income, like $1 per year, and instead borrow their yearly requirements against the value of their shares. That could be $10M tax free - it is borrowing so it isn't income - and a sales tax starts to look like a pretty good idea! That'd be $1M in tax on a sales tax of 10%, vs $0.
Anyway, like I said, tax is complicated!
Sales tax is easy to avoid, especially for the rich: buy things outside of the taxing jurisdiction.
“Best” is always specific to a value system. An economist who pretends “best” is an objective question has confused their subjective value system with universal truth.
> The reason is it doesn't hinder savings and investments
That's only true if you only consider first-order effects, just like saying taxes on corporate income are best because they don't effect consumers ability to afford goods and services would be. Consumption taxes negatively impact investment returns (and thereby also the incentive to invest) by depressing quantity traded of consumer goods at any price level.