Sales taxes are regressive - people who don't have a lot of money have to spend more of it to stay alive, and therefore pay more sales tax :/ I'd rather have a higher income tax and no sales tax. Income taxes are much more visible, but don't suffer from penalizing people who can't save.
It is not a "politician makes non-promise" story. It is actually a very credible claim because the Japanese government doesn't even need more tax income as they can lend freely.
The government can lend as much Yen as they want. The tax hike is something that can help them get inflation, which has been too low for very long.
I called it a non-promise because, like every second time a politician says something, he appears to have carefully worded it such that he still change his mind later. Not because I don't believe him, I have no opinion on and no idea about Japanese internal economic policy. My argument is that the tl;dr here is "a politician said a thing", which is not usually notable enough for HN.
I think the state tried just every possible thing to reverse currency trends and ease fiscal restraints, but just all failed including an enormous quantitative easing (money printing basically)
>earlier this year suggested Japan’s sales tax needed to rise to as much as 26% to pay for bulging social security costs
Wouldn't that absolutely crater consumer spending? I know if I had to pay 26% sales tax suddenly everything I buy would be from China and ship labeled "personal gift".
Customs is cracking down hard on Chinese shipments. Often ignoring the "personal gift" label, because a majority are not. Sweden has introduced an extra import tax on Chinese shipments.[0]
In Sweden, they pay 25% VAT, with some reduced rates. In Denmark, it's 25% with no reduced rates. Although used items are VAT free. And speaking as a Dane, I honestly don't have a problem with it. Even though I have to send invoices from time to time, and charge a 25% VAT.
It isn't an extra import tax, just enforcement of VAT that was always a requirement (and always happened if you used a courier like UPS or DHL rather than the post office). Some countries have minimums however, but that will be removed in the EU in the future.
High VAT is probably the only EU-wide taxation scheme that works well. All other taxes can be avoided in a way or another, thanks to the lack of tax harmonization. Corporate tax itself is subject to systematic avoidance from big companies thanks to countries like Ireland, Netherlands and Luxembourg. That is crazy.
Taxes go to the State, which ultimately goes back to you and to those in needs. It's not a theft, it's a shared account for the common good. Moreover it's a tax on consumption, not on production.
High taxation is what makes something like Healthcare so good and eventually cheap for everyone, contrary to the disastrous situation in the US. As a French I'm more than happy to pay 20% VAT if I know it's going to benefit everyone.
Of course it is theft since it is taking away from you the outcome of your labor with the usage of force. If you go by that logic then you might as well abolish private property for the common good.
Private property isn't as easily shareable as money, your comparison doesn't make sense. The State can't take 20% of my house and "redistribute" it.
If, however, you're saying that there is enough production of, say, cars, for everyone so that we can all have one exactly when we need, I'd see no problem having it shared with others in a way I can't decide (because I know I'm going to be able to have one when I need it). But that's probably because I think there are too many cars already.
So what is tax if it is not theft? Genuine question to see what is your definition of theft and how taxes do not fit such definition. If you have no say in paying for something, how is it not theft?
You do have a saying. Speak to your representative if you want to adjust the percentage. Taxation is a commonly agreed sharing of goods. Theft is not agreed upon.
If you live with your significant other and you agreed on a 50/50 rule for paying rent, would you say they/this relationship is stealing money from you ? That doesn't make any sense.
If you don't want to be taxed then don't live in the society and don't use any of the things it provide: no roads, no healthcare, no police (so if someone actually steals from you you're not entitled to complain because you're not part of the society), no food or water coming from a store... If you don't want to participate to the society, then you don't participate to the society.
- your government being able to manage its funds well. Well too bad, they do a piss poor job at it and keep increasing taxes year after year.
- the majority during elections not voting for more government intervention, which would lead to more taxes as well.
Plus, your example with your significant other does not make sense since you do have a contract/agreement. As a citizen no such agreement/contract is ever signed with you: the conditions are imposed and force is used upon you if you refuse to pay taxes.
> If you don't want to participate to the society, then you don't participate to the society.
That still does not make taxation not theft, since you are never asked how much you want to contribute voluntarily for example: you never enter a contract as a willing party. Plus, let's say you don't want to "participate in society", the state will still find you and jail you for not paying taxes even if you decide to live on your own.
_My_ definition of theft is completely irrelevant. Theft is inherently defined by law and thus by the state. It would be very interesting if anyone can show me any law that defines the collection of taxes as theft - because it'd be stupid.
No, I criticized the argument that it is for the common good, since it can be used easily by any regime to crush individuals at their will. You can resort to all sorts of ugly behavior for the pretense of common good.
It's a tax on "luxuries" as I understand it. I'm just not sure yet how putting food on your table is supposed to be a luxury.
The hard part is that in theory, healthier, "natural" food (e.g. fresh fruit and vegetable) should not have VAT, but it's just more expensive anyway than cheap processed food that's had "value added" by the process.
Take the fruits and vegetables from your own garden/farm by yourself, you won't pay a cent on it. Take it from someone else who worked to make it happen and you're paying taxes on this added value. This doesn't sound too foreign to me.
Healthier, more "bio" food is more expensive because efficiency is lower and the scale and choice of harvesting means don't allow it to be cultivated at the same rate, so the base price is higher. VAT is not playing any role in making it more or less expensive.
That's fine if you have the luxury of growing it yourself. If you live in a city like a lot of people do in the UK you don't have the luxury of owning a garden, so having somebody else grow it is a necessity.
In the end, for the poorer, at least in the likes of the UK, it means they eat less healthily because they need to buy cheaper, processed and less nutritious food that keeps longer.
I don't disagree with anything you're saying in textbook terms, but reality is different.
If you live in a city it's because you want to. Noone forces you to get an excruciating job for little money in the concrete jungle, it's a choice you made. Our farms and our farmers are struggling to keep up, there is a ton of space out there where you can grow your own food if you want to.
In the end there will always be something that you need someone else to do and that's fine, it's because as a society we have gone the way of specialized individuals providing for the rest of the society. I do believe however that it doesn't mean you must work to be part of the society, because IMO we should shift towards a universal income. But that's another discussion.
> If you live in a city it's because you want to. Noone forces you to get an excruciating job for little money in the concrete jungle, it's a choice you made.
Respectfully, I disagree. It may be a choice somebody made at one point in time, but for the poor it's not a decision they have the luxury to fix. Some can't afford to take a day or several off of work to move, or even to look for somewhere else to live and another job, or they don't put food on the table. Even if they can, without time and money, and a good job, nobody is going to rent a home to them outside of the big city.
Cities like London make it extremely difficult for these people to live, but at the same time make it possible, and even then it's in conditions most would be unhappy to live in, all because someone will give them a space in a room for cash without any credit checks or all of the red-tape that would be required anywhere more laid back; things are possible in the city purely because of volume, and rules are relaxed to keep the pace.
Getting out of being poor in a country with an economy like ours is difficult. Having space to grow food is no good if nobody will let you use it, or if you work such long hours you don't have the time to do it, what about having the energy to do it? poorer people tend to work more physically demanding jobs.
I've seen your textbook system work, in less developed countries where people have the luxury of time and space because their cost of living isn't an overbearing demand and specialisation is lower.
You can't argue we're specialised, then at the same time say everyone should grow their own food, that's the farmer's job.
I'm not sure what the solution is, but finding a way as a society to take some of the strain off of people who are struggling just to feed themselves is a good start.
It's a tax on all the added value that intermediaries have provided, but it's you the consumer who pays it. That's why I'm saying it's a tax on consumption.
And that's after significantly higher rates of income tax and social contributions too.
I know Europeans say they like their free healthcare and social services, but the cost seems to be about 20% extra tax on the average income. That seems unreasonably high to me, even compared to the US system.
The advantage of a welfare state to me, personally, is predictability. If I were to get into an accident, break some bones and not be able to work for a few months, I would not be charge a large hospital bill. Nor would I lose my salary.
You can argue it's sort of an insurance scheme that everyone is forced to be part of. But compared to private health insurances, it's actually very cheap, because _everyone_ is chipping in. So even with much higher tax rates, people of a certain means (say middle class), have a comparable higher disposable income, because our expenses are predictable.
(Note that there still exist unforeseen expenses, but they never reach the levels of some hospital bills in the US seen reported.)
> A lot of economists consider sales tax to be the best way to tax
“Best” is always specific to a value system. An economist who pretends “best” is an objective question has confused their subjective value system with universal truth.
> The reason is it doesn't hinder savings and investments
That's only true if you only consider first-order effects, just like saying taxes on corporate income are best because they don't effect consumers ability to afford goods and services would be. Consumption taxes negatively impact investment returns (and thereby also the incentive to invest) by depressing quantity traded of consumer goods at any price level.
"The reason is it doesn't hinder savings and investments"
-Said no low income earner ever.
Sales taxes are regressive taxes. It's stealing out of the pockets of people who are too poor to find time for politics or who are too uneducated to understand that they are being mugged.
If I was an economist with a college degree, I would also support sales tax.
Tax is undeniably complicated, and I have no firm opinion what is better, and I'm often shocked when people do. The regressive nature of a sales tax is bad, but then, income tax is so easy to avoid. We all need things, making sales tax almost unavoidable, and what's the point of being rich if you can't spend it?
The problem with income tax is that it encourages the richest to run scams where the ROI is "cost of accountant + tax saved < expected tax = do it". If your income exceeds $100,000, it is almost guaranteed to be worth it to hire expensive lawyers.
Then there are the terrible scams like the one I read (which I can't confirm) where startup founders with public companies receive a minimal income, like $1 per year, and instead borrow their yearly requirements against the value of their shares. That could be $10M tax free - it is borrowing so it isn't income - and a sales tax starts to look like a pretty good idea! That'd be $1M in tax on a sales tax of 10%, vs $0.
Indeed. If I buy a gun or a car or a TV I pay sales tax. If I sell it I have to collect sales tax and then pay income tax on the sale despite buying it with money that was already taxed once. If I buy stocks I pay no tax at all unless I manage to sell them at a profit, which is insane. Treat stocks like any other property: collect sales tax on the purchase and then income tax on the gross revenue after selling them regardless of whether you made a profit.
