Re: taxes

[BILL MITCHELL <ECWFM@xxxxxxxxxxxxxxxxxxx>]

Alan argues:

>The big advantage of taxing consumption is that it taxes
>wealth as well as income, and quite directly. (Consumption
>studies link consumption expenditures to both.) I see
>no reason why progressivity could not be achieved by
>combining this with, e.g., an earned income credit.
>Selective tax treatment of food and housing expenditures
>(e.g., don't tax the first $x of rental expenditures)
>could help.

The better-off (with businesses and access to the same) can also
evade a broad-based consumption tax easily doing contra deals with
their mates. i also prefer however a tax of this kind, b/c it is less
evasive. i do not think in terms of the disincentives of income tax viz
indirect taxes.


but the real point of progressivity has not been raised here. it is
the progressivity of the whole system of taxation and spending which
is important to those wishing re-distribution. to concentrate on a
particular tax or group of taxes in isolation is missing the point.
if we could get zillions of revenue at low admin cost from a hugely
regressive tax yet spend the $ hugely progressively then the overall
system will achieve our goals.  the problem is that governments
do not tend to think like this.

ans while we are on the  tax side, Alan says that a consumption tax
is also a wealth tax (due to the correlation b.tw the c and w). well
maybe, but the tax is on a flow. wealth as a stock delivers benefits
beyond the meagre ability to consume. it is better to tax wealth as a
stock and then get the flow benefits via a vat or direct income taxes.

make the bastards pay every way is the message .

kind regards
bill
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