

Bill Gates: Don't tax my income, tax my consumption [video] - k-mcgrady
https://www.youtube.com/watch?v=ar0ri9NLArs

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sp332
But rich people spend much less of their income than other people do. And poor
people living paycheck-to-paycheck spend 100% of their income. So only taxing
consumption is a huge benefit to rich people over poor people.

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coreymgilmore
The rich _could_ spend less percentage wise of their income (they may also
spend more since they have more disposable income), but they could also spend
more in a real dollar value wise which would generate more tax revenue.

Taxing consumption already occurs: For example, if you drive a car you pay the
gasoline tax and therefor pay more than a person who doesn't drive a car (who
doesn't have to pay for fuel). Similarly, sales tax. The more you buy, the
more tax you pay.

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sp332
Real dollar value of rich vs poor isn't the question. Unless something is
horribly wrong, the rich will always pay more tax dollars than poor people!
The question is taxing income vs taxing consumption. Taxing income means you
get more money from rich people than you would if you only taxed their
consumption, since they spend a smaller percentage of their income.

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lsaferite
Taxing consumption vs. taxing income promotes more savings and less
consumption.

Also, in theory, you simplify compliance and decrease evasion as your tax
income comes from businesses and not individuals.

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dragonwriter
> Taxing consumption vs. taxing income promotes more savings and less
> consumption.

Right, but I don't want "more saving and less consumption" as much as I want
more people to be able to afford to choose whether savings or consumption is
best for them, and taxing things that the poor do more than the rich promotes
_less_ people being able to afford to choose whether savings or consumption is
best. Marginal propensity to consume is pretty strongly negatively correlated
with income at all levels, so _even with poverty-level exemptions_ that create
some progressivity at the lower end, consumption taxes are overall regressive
in income.

> Also, in theory, you simplify compliance and decrease evasion as your tax
> income comes from businesses and not individuals.

This only makes sense, even in theory, if you start with the presumption that
the average business is less likely to seek to manipulate things to minimize
tax (whether through avoidance or evasion) than the average individual, which
is an assumption which could use some justification.

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lsaferite
Well, the point was by simplifying compliance due to a much smaller tax
collection base, you reduce the likelihood of non-compliance due to the higher
scrutiny.

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badman_ting
No, no - don't tax his income, tax his wealth :)

