Income v. Consumption taxes
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I support consumption taxes. I feel that is the most "fair". And it encourages saving, which is a plus in our debt ridden society
However I can see a drawback. Healthy economies are dependent on the populace spending. Hence govenrments always try to encourage it to jumpstart an economy. Consumption taxes do not encourage spending.
However I can see a drawback. Healthy economies are dependent on the populace spending. Hence govenrments always try to encourage it to jumpstart an economy. Consumption taxes do not encourage spending.
consumption taxes tax what is used as opposed to what the govt thinks you earned.
A flat income tax of about `15% with no deductions would work well too
A flat income tax of about `15% with no deductions would work well too
With consumption tax, the poor can get a government rebate, with income tax the basic exemption can be set high enough so the poor don't pay.
I like the consumption tax because it discourages consumption, income should always be encouraged.
There are other ways to tax that aren't among the choices.
I like the consumption tax because it discourages consumption, income should always be encouraged.
There are other ways to tax that aren't among the choices.
Yes, however high income earners can move, and they create jobs for the low income earners.Both, consumption only and flat taxes place too much of a burden on low income earners.
I always wonder how much a few select taxes have ultimately cost the Canadian economy. Things like the corporate tax on capital (encourages investment in China), double taxation of dividends (discourages investment in corporations), and the capital gains tax (discourages investment.) The PST can be a really heavy-handed tax when financing new startup businesses too. Additionally, heavy taxes on high-income earners encourage the wealthy to move out of the country.
Most people work for corporations, and we all want jobs. Encouraging startups, small businesses, larger corporations, high-income earners to make money in Canada, creates jobs here too.
A flat tax is simply not powerful enough to fill the government coffers. And tax policy can be used to guide economic behaviour. I favour a consumption tax, with a rebate to the low income earners. If someone is wealthy enough to spend $250,000 on a pleasure craft for Lake Simcoe, that person is wealthy enough to pay a hefty tax.
While the current paradigm is to encourage the consumer to spend spend spend, who really profits? How many goods are made in China these days? How many services are farmed out to India? How much of our produce comes from Central and South America? Lets be honest, we could cut our consumer spending in half and invest money in education and job retrained and be better off than we are today.
As for corporate taxes, don't forget that corporate welfare is far more generous than social assistance to individuals.
While the current paradigm is to encourage the consumer to spend spend spend, who really profits? How many goods are made in China these days? How many services are farmed out to India? How much of our produce comes from Central and South America? Lets be honest, we could cut our consumer spending in half and invest money in education and job retrained and be better off than we are today.
As for corporate taxes, don't forget that corporate welfare is far more generous than social assistance to individuals.
How on earth do you figure that Compromised? Is that not part of the determination of what if any deductions will be allowed and the rate?A flat tax is simply not powerful enough to fill the government coffers.
The big advantage of a consumption tax is that it does not distort choices between current and future consumption. Thus, it does not discourage savings. Savings are what lead to capital accumulation which leads to economic growth in the long run.
Although I favour consumption taxes, I should say that they don’t have to be exclusively implemented at the retail (or other commodity transaction level) level the way they often are. Consumption is simply income minus savings. If you allow people to deduct all savings when they will out their tax forms (e.g. instead of just being able to deduct RRSPs you let them deduct everything they don’t send), you have a consumption tax. If we went to 100% consumption taxes, this is from should definitely be in the mix. Also, this form would allow any degree of progressivity you want.
BTW, regarding the question of flat taxes. That is just a special case of the above. The phrase “fair” tax really makes no sense as “fair” is a normative concept. One person’s fair is another person’s unfair.
Although I favour consumption taxes, I should say that they don’t have to be exclusively implemented at the retail (or other commodity transaction level) level the way they often are. Consumption is simply income minus savings. If you allow people to deduct all savings when they will out their tax forms (e.g. instead of just being able to deduct RRSPs you let them deduct everything they don’t send), you have a consumption tax. If we went to 100% consumption taxes, this is from should definitely be in the mix. Also, this form would allow any degree of progressivity you want.
BTW, regarding the question of flat taxes. That is just a special case of the above. The phrase “fair” tax really makes no sense as “fair” is a normative concept. One person’s fair is another person’s unfair.
The flat tax idea has been around a long time. Various provincial governments have looked at it and it always dies a slow quiet death. While I have never bothered to actually read the numbers, I have been told by members of both the academic community and a senior ministry official that a flat tax would not bring in enough revenue or it would be too punishing to low and low-middle income earners.How on earth do you figure that Compromised? Is that not part of the determination of what if any deductions will be allowed and the rate?
Consumption taxes are things like the GST and PST. Basically, they are taxes on what you spend.For fuck sake. When did those bastards pass a constipation tax .
So I see, based on what people have written. But this was not meant as an all-encompassing survey. But duly noted.Misterme your poll gives no flat tax or fair tax options
How about a graduated system of consumption tax?
If you are buying food in a grocery store (or McDonald's), clothes at Wal-Mart, etc., you pay little or no tax.
If you are eating at fancy restaurants, buying clothes at high-end department stores, etc. you pay maximum tax.
If you are buying food in a grocery store (or McDonald's), clothes at Wal-Mart, etc., you pay little or no tax.
If you are eating at fancy restaurants, buying clothes at high-end department stores, etc. you pay maximum tax.
Depending on your view on equity, you may favour such a tax. However, it is inefficient. For efficiency, you want to tax things that won’t distort behaviour. That is, you what to tax things that economists say have an inelastic demand. Thus, for efficiency reasons, you want to tax them at a higher rate than fancy restaurants, etc. Thus, to some extent it becomes a normative issue. That is equity (taxing those more able to pay at a higher rate) versus efficiency.How about a graduated system of consumption tax?
If you are buying food in a grocery store (or McDonald's), clothes at Wal-Mart, etc., you pay little or no tax.
If you are eating at fancy restaurants, buying clothes at high-end department stores, etc. you pay maximum tax.
i find it funny that people on an escort review board would recommend solely consumption tax (it is one of the choices on the poll) as a way to ensure healthy fiscal policy...
can i get a show of hands of hobbyists who forsee themselves paying gst/pst/hst when going on "dates" and agencies that will charge such taxes?
pure consumption taxes will just drive the underground economy or move things more to a cash basis. think about the $3 dvds you pay at p-mall; you think those guys are remitting all the appropriate taxes to the govt?
can i get a show of hands of hobbyists who forsee themselves paying gst/pst/hst when going on "dates" and agencies that will charge such taxes?
pure consumption taxes will just drive the underground economy or move things more to a cash basis. think about the $3 dvds you pay at p-mall; you think those guys are remitting all the appropriate taxes to the govt?
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But without an income tax, you get ~100% of your paycheck, which gives you the spending power.i find it funny that people on an escort review board would recommend solely consumption tax (it is one of the choices on the poll) as a way to ensure healthy fiscal policy...
can i get a show of hands of hobbyists who forsee themselves paying gst/pst/hst when going on "dates" and agencies that will charge such taxes?
pure consumption taxes will just drive the underground economy or move things more to a cash basis. think about the $3 dvds you pay at p-mall; you think those guys are remitting all the appropriate taxes to the govt?
You need both in our economy, if you eliminate one it will creat an imbalance in our fiinancial systems. If you eliminate consumption tax, all of society will pay a bit more but it will create dishormony between user groups in society, if you eliminate income tax, the users won't be able to afford anything due to the very high consumption taxes. The trick is to find the right balance between the two, and make the necessary adjustments as the economy changes.
The big reason theat it has never been followed up on is the screaming by the left side members of the chattering classes and media. The idea that " fair taxes" means if you can afford it you must pay a bigger share. The politician that can ignore or call the bluff of the critters has not yet been born.The flat tax idea has been around a long time. Various provincial governments have looked at it and it always dies a slow quiet death. While I have never bothered to actually read the numbers, I have been told by members of both the academic community and a senior ministry official that a flat tax would not bring in enough revenue or it would be too punishing to low and low-middle income earners.
The idea that a flat tax would not fill govt coffers is a real argument that govt spending needs to be looked at.
