Income Tax vs Consumption, Pollution and Land Taxes:
- Income tax can discourage making money. Because most income tax systems are progressive, for most of people, their current income tax isn't enough to make them seriously consider quitting their job just so they won't have to pay taxes, but it does encourage employers to make decisions based on how it would effect their taxes rather than what's best for the ccompany and the local or global economy, and that can be very harmful to the economy. An income tax would result in a society where people try to hide or preserve income by keeping it in nonmonetary form for as long as possible and making investment decisions that are in part dependant on local or regional differences in tax, as well as the possibility of high unemployment due to employers deciding they're better off hiring elsewhere.
- Consumption tax discourages people from consuming, which hurts the economy. A more progressive sales tax charges more for items the government decides that poor people don't need, but that hurts jobs in industries like aviation and shipbuilding. And if you're a libertarian, simply having a list of "items the government decides that poor people don't need" is not a good thing either. A consumption taxwould result in a society where people earn more but prices are higher, i.e., inflation, more people save rather than spend, which limits economic growth, and the poor are more dependant on subsidies or a "progressive sales tax" that encourages them to buy "government approved products", as well as the possibility of high unemployment due to a decrease in demand.
- A pollution tax would primarily raise the price of fuel, power, and packaging. Unfortunately, those three areas can really cripple a stagnant economy, because farming, minng, manufacturing, etc. are all dependant on these things to get their goods and services to where it needs to go to meet the demand. Thus prices skyrocket and demand goes down. A pollution tax would result in a society that was more environmentally consciencious, in deed if not necessarily in thought, but the prices for household utilities, goods, and services would be very high, as well as the possibility of high unemployment due to a decrease in demand.
- A land tax would, as has been mentioned, increase housing costs, both for landowners, who pay the actual tax, and for renters, who would have a rent increase because the landlord is passing on their costs to avoid foreclosure. As people suffer forclosures and evictions, homelessness increases, and property values fall. A land tax would result in a society where people lived in smaller homes, land and consumer products were cheap, and homeownrership was a bad investment except for rental companies. This would likely in turn discourage sales of large durable goods because people couldn't fit them into their tiny homes. With real estate, construction, appliances, etc. all taking a hit, unemployment would again tend to be high. Plus homelessness would be a serious problem.
edited 10th Dec '11 1:28:50 PM by FrodoGoofballCoTV
edited 10th Dec '11 1:45:20 PM by HiddenFacedMatt
edited 10th Dec '11 2:42:06 PM by Karmakin
edited 10th Dec '11 2:44:41 PM by HiddenFacedMatt
edited 10th Dec '11 2:55:31 PM by Karmakin
Negative income tax with (rather high, for that matter) upper limits = Bad Idea*
Flat-rate income tax supplemented by various other schemes = Better Idea Land taxes = Bad Idea
Sale-of-land taxes = Better Idea* Across-the-board consumption taxes = Bad Idea*
Luxury taxes = Better Idea Pollution taxes on consumers = Bad Idea
Pollution taxes on producers, trickling down to consumers through price = Better Idea
edited 10th Dec '11 8:17:29 PM by ekuseruekuseru
edited 11th Dec '11 7:54:36 AM by greedyspectator
edited 12th Dec '11 1:28:51 AM by greedyspectator