
Ask HN: Opinions on a novel and respectful tax system - ilovetux
I am seeking opinions and critiques for an outline of what I feel is a fair and balanced tax system which manages to respect the ownership role of economic stakeholders.<p>Just to be clear, I am (recently) very aware of the US tax system and am under no delusion that the ideas stated below will ever be adopted by the US. I am simply looking for opinions about the ideas that I have come up with after thinking critically about taxation and about the stakes held by the various players of our economic system.<p>We are taxed to fund the activity of our governments (local, state and federal). Taxation is both necessary and helpful, but how can we handle this in a way that is fair and respectful?<p>From my perspective, we should ask &quot;Who owns the US economy?&quot; The only logical answer is that it is shared among all of its participants. If the government is able to levy taxes against any participant of our economy, should a portion of said taxes not be returned to the citizens of our country.<p>I would like to propose a system of taxation founded on the idea that we should provide a fair economy to our citizens. This system comes in two parts:<p>Every transaction would be considered as having two parties, a buyer and a seller. Each would pay a tenth of the monetary value of the transaction as tax; the seller&#x27;s 10% would go to the federal government while the buyers 10% would be split evenly between the state and local governments.<p>A 10% tax would then be levied against each applicable level of government and split evenly. This would mean that 10% of the taxes collected by the local, state and federal government would be split evenly based on residency. So each year (or month, or day) everyone would receive their share of the taxes collected by their respective levels of government.<p>Thank you for taking the time to look and please comment below.
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twobyfour
Taxes formulated like this tend to be regressive, since people with lower
incomes tend to spend a higher proportion of their income than people with
higher incomes do.

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ilovetux
That is a great point, haven't considered that part of it. This is exactly the
reason why I wanted to solicit opinions and critiques. Thank you for raking
the time to comment.

I am in the position that I will almost certainly never wield any political
power, so starting discussions to help me understand all the dynamics helps me
come to terms with the way things are.

I want to think this part over before I really formulate a response. I thought
that having both the buyer and seller pay 10% would mediate these kinds of
issues and I was ready to respond with that, but in the end it's really the
buyer that is paying all the tax since the seller would simply add the tax to
the sales price.

In the end, I want to come up with a system (even if it's never implemented)
which is fair, balanced and actually helps people. I don't think we have a
fair tax system at the moment but if we can come up with a system which is
understandable, justified and fair then we can use those ideas as a basis for
a future generation to create a good system.

Just to be clear though, I am looking for fair and justifiable mainly, I don't
necessarily need the system to create a redistribution of wealth or even to
target higher income people.

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kej
This is basically a Value Added Tax (VAT) combined with a Universal Basic
Income (UBI). Both of those are things that have been proposed in the U.S. and
elsewhere.

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ilovetux
I agree, that's basically where I drew inspiration, but I wasn't very clear as
I intend this to replace all (or most) other taxes such as income, sales and
property (maybe not property tax).

I think it differs from a UBI in that the amount is variable, being percentage
based, and could be justified as a something that is owed to the economic
stakeholders hopefully avoiding the perception of being a handout. It would be
like your citizenship payed dividends based on the GDP.

I think this more closely resembles the "Fair Tax" which is itself a variation
and combination of a VAT and UBI.

