Idea: We all pay the sales tax. Ideally, a sales tax is supposed to be fair, should have a high compliance rate, should be difficult to avoid, should be charged exactly once on any one item, and should be simple to calculate and simple to collect. Sales tax is a regressive tax; that is, low income people tend to spend a greater percentage of their income in taxable sales (using a cross section time-frame) than higher income people. If all purchases are subject to the same tax rate, the tax rate itself is flat with higher income people paying more tax as they consume more. How about sales tax based on your income? Most of the purchases are done using credit card or debit card nowadays, which can be linked to your SSN (and hence your last year's income). When you swipe that card, the reader could use this information to charge your appropriate sales tax.
Reward: A more just tax system?
Bonus: The system could also be leveraged to give discounts based on your income range. We could also devise a different progressive tax in which the tax increases as you buy more items. This scheme will prevent us against frauds of using lower income people to buy stuff for you. Not only that, it will also encourage more efficient use of all the resources available.
2 comments:
Awesome cartoon!
The idea sounds fair but aren't you being too pro-consumer?
What happens to sellers?
Your sales tax shouldn't be applied to all kinds of items, items should be discriminated based on mass consumption and taxes applied appropriately. For perishable goods, keeping a flat rate makes sense because you tend to use them up/ buy them more often.
I beg to differ. I am not being pro-consumer. I am being earth friendly in overall resource consumption.
I do agree with your argument about discriminating items based on mass consumption though. I really don't want to worry about paying higher sales tax on my next can of milk.
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