6 ms·

What you're flailing around trying to reinvent is the VAT (value added tax).

• newjersey 11y ago
  Forgive me. It was definitely not my intention. I especially do not want it to somehow replace income tax. I think we need a very progressive income tax to the point where it is essentially an income cap (my proposal is a 90% tax on income that is over 2000 * 100 x the minimum wage per hour or 100x the basic income payment per year in case we get there). My idea for no deductions and no exclusions was mostly directed at individuals.
• ptaipale 11y ago
  And not even Value Added Tax, but Value Tax. If a shop buys something for $10 and sells it for $15, the value added is $5 and you pay a percentage of that as VAT. What the parent proposes is that you pay a percentage of $15 as tax, and cannot deduct the cost of sales (no deductions, ever).
  • newjersey 11y ago
    Forgive my ignorance but what happens in the case that a vendor buys something for $10 and sells for $5? Do they get a rebate from the vat office?
    • ptaipale 11y ago
      Well, effectively, yes. Each seller charges VAT rate on his output and passes the buyer a special invoice that indicates the amount of tax charged. Buyers who are subject to VAT on their own sales (output tax), consider the tax on the purchase invoices as input tax and can deduct the sum from their own VAT liability. The difference between output tax and input tax is paid to the government (or a refund is claimed, in the case of negative liability). https://en.wikipedia.org/wiki/Value-added_tax https://en.wikipedia.org/wiki/Value-added_tax