If we want to talk about individuals, the top wealthiest individuals pay less in taxes proportional to their individual wealth now than they did in the 1980s and 1970s.
It seems weird to want to pivot to individuals being taxed and then comment on how much those individuals pay as a group, and not look at whether or not individuals being taxed are being taxed at a fair rate over time.
> If we want to talk about individuals, the top wealthiest individuals pay less in taxes proportional to their individual wealth now than they did in the 1980s and 1970s.
Yes, and if you look at my other comments here, I'm in favor of all individuals, regardless of wealth paying the exact same in taxes via a flat tax on consumption.
Whatever the flat tax percent is, it should be paid by everyone equally in proportion to their consumption.
That is tricky to implement. What consumption counts for tax purposes? Should luxury items be taxed higher?
For example, poor people have no choice but to eat, and their food costs won't be that much lower than a rich person's food costs (assuming artificially that everyone cooked at home).
Therefore, because rich and poor people will eat about the same amount of food, and the cost will be "about" the same, then the amount of tax paid will be about the same. But as a percentage of the person's income, the poor person will have a drastically higher burden of taxation.
And even if consumption tax proponents were willing to allow for luxury item tax rates, rich people would always have a way around it. For example, would renting an item be taxed the same as buying it? Or what if instead I receive access to my Ferrari as a perk of working for my hedge fund? The poor guy who buys the $2,000 used junker will have to pay consumption tax, but I won't.
For every rule there are probably multiple loopholes. And even if a fair system could be devised, it would never see the light of day because you could never get enough people to agree on what that system would be.
All of this is just pointless thought experimentation anyway; the current corporate-political structure likes the current system much better than they would like any radically different system. Therefore, nothing significant is going to change.
I wouldn't phrase it that way but I could see the argument for exempting only the most basic necessities from taxation such as very basic end-consumer foodstuffs (generic non-organic unbranded flour, eggs, milk, in-season domestic fruits and vegetables, etc, generic commodity processed food goods, if a company slaps a brand on it, it should not be exempt). For housing, maybe the first N dollars of housing costs where N is the median cost of the cheapest 10% of housing stock in a local market.
Whatever the decision that is made, the main thing that needs to be conserved is that everyone that votes should feel the pain of taxation for any consumption above and beyond mere existence. If we don't all feel the burden of paying for governance, how are we all supposed to take the same interest in making sure that that governance is spending taxpayer money wisely. This is especially important in a democracy where the majority can rule. What you can't have is a situation where the majority with the votes doesn't feel the burden of the governance they are voting for. That's a recipe for disaster.
> For example, would renting an item be taxed the same as buying it?
renting is consumption
> Or what if instead I receive access to my Ferrari as a perk of working for my hedge fund?
gifting is consumption. Stuff like this is already stuff that people have to include in their income taxes.
> For every rule there are probably multiple loopholes.
that's no different than for the status quo. loopholes are a fact of life in a system. the more complex the rules, the most loopholes there are
> All of this is just pointless thought experimentation anyway;
I disagree. It's important to identify the shortcomings of the current system and that is that it leads to voters that are drunk on transferism. If you don't identify such shortcomings, you can't fix them.
It seems weird to want to pivot to individuals being taxed and then comment on how much those individuals pay as a group, and not look at whether or not individuals being taxed are being taxed at a fair rate over time.