Ask HN: Daddy, what's "tax"?
My daughter just asked me this. I could only laugh.
Now, give her a toy she doesn't like and say this is what you just paid for.
But before you let her get too mad, tell her to go ride her bike and inform her that the toys she gave up helped pay for the streets/sidewalk on which she rides her bike.
Not perfect, but could be worse.
How is that not part of the tax system?
I think anytime you touch on a politically relevant topic, a lot of people will dislike it, no matter what it is. Unless its like a human rights issues like current Egyptian affairs.
You can substitute republicans in there too, as long as you are talking about the last two decades or so..
"Government needs money to run. They have to develop infrastructures and pay salary of public servants. Also they have to provide welfare to under privileged and subsidies to student communities and such. They cannot just print infinite number of notes so they have to take money from the current cash flow. The cash flow here means things like purchases, salaries, revenue, real estate etc. Now, to do that they have to decide how much to take from whom. They cannot take a fix amount as not every mode of cashflow would be viable with that fix amount. So they decide how much to pull from where. Thus on income we have income tax. But that too is not fixed. You pay depending upon the size of your income and nothing else. Thus ideally, the rich pay more and poor pay less. On the other hand, you have things like sales tax, where the government takes a fixed percentage of all the sales made by a company.
In short the government takes some amount of your money each time you make a transaction... well most of the times. But rest assured, your money comes back to you. The government gives it back in terms of infrastructure or services or carnivals or social security or things like that."
I know this is not perfect, nor is it what happens in the real world. But this is what should happen I think.
Actually, they could. Printing say 1 note for every 9 notes in existence would lead to an inflation of around 11% and is equivalent to a uniform property tax of 10%.
The reasons we don't do things that way I can think of are:
- it would make inflation huge (government spending typically is over 30% of GDP; that would give over 50% inflation)
- it was not possible under the gold standard.
- people would feel it as unjust that one's cash and bank accounts are 'taxed', but e.g. houses one owns are not.
- because of the former, it would tax the poor way more than the rich.
It would be a really good way to stimulate consumer spending, though.