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Comment by piker | Hacker News Reader

VAT is the most regressive tax since inflation. Rich people spend basically zero of their wealth. Poor people spend almost all of it. Even though there are exceptions and item-level exemptions, it's still the poor people who feel these prices the most, and it is reflected in spending behaviors in European countries in my experience.

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VAT is regressive when you consider wealth yes, but as I wrote in the piece it's both counterbalanced by the UBI, and indeed there are mechanisms by which VAT is actually progressive. This OECD paper goes into more detail [1]. The short version is: VAT on its own and in practice is regressive but only because of savings. That's pedantic, I know, but it matters for the purposes of how the VAT-UBI loop scales. In particular, it allows you to fund a larger UBI more quickly than with any other funding method.

[1] https://www.oecd.org/en/publications/reassessing-the-regress...

from the paper:

> 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.

It's priced in, yeah. As I said in the comment and in the post, VAT on its own is not nice. The paper also states:

> 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.

I see the point, but I don't see what is wrong with that, and I am relatively poor person. I see calls for equality all over the place, but nobody wants to be equal, especially not in taxation - a fix amount (not percent of something) sum per citizen is equal and nobody wants it. Equal rights, equal taxes, equal obligations, no exceptions - be it financial, demographic, military, etc.

A Georgist-style land value tax (LVT) is fairer and has the added benefit of ending land speculation, a practice that leads to distortions in the housing market and harmful property boom-bust cycles.

That is basically removing property rights, when the land is not yours but you just rent it ... you will own nothing and be happy.

You didn’t make the land (nobody did). LVT is the “least bad” tax because in an LVT-exclusive system you are not taxed on your labor, your inventions, or your possessions. You’re only taxed for your exclusive use of a common resource (land).

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.

You bought the land, so it is yours, right?

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.

Land is a category of thing that isn’t always straightforward. All land borders other land. Land has more land underneath it and sky above it. Water runs both into it and out of it, and often that water is crucial to neighbors. It has been there before you and will be there after you. Land as an aggregate defines a nation of laws and men. Land can be on a national border.

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.

First you are deflecting and going in discussions about points that were never made, then you keep preaching a system where you don't have property rights under the nice "think of the children" pretext that it is a "pro-development". Basic communist argument of the greater good against the individual.

A number of people do refer to it disparagingly as “land communism.” (Especially those on the California property ladder.)

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?

How about we make taxation as a fix amount per citizen and then nobody needs to declare their income OR land? And it is equal and fair, as in "pay your fair share", and that's it: you are a citizen, then you pay $X as your contribution like everyone else. Problem solved.

Flat tax is also a possible solution, but a truly flat tax would probably have to come with substantial welfare for the lower classes, as the tax burden would fall disproportionately on them. (This is less about “fairness” and more about preventing bad outcomes like mass criminality and/or revolution.)

I was about to comment something like this. Consumption from a VAT perspective doesn't increase linearly with wealth, so a more wealthy person isn't going to spend and get taxed via VAT 100x more than someone with 100x less wealth, and VAT affects the poor much more than the rich because it's a tax on consumption irrespective of wealth, so the poor pay a larger percentage of their wealth to VAT.

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.

This. But this is also by design. So ask your government why it has been designed that way.

It's because an all-encompassing taxation system gives value to the paper money the government and the banks create.

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