Why all government in the world abolish the income tax and survive on the VAT /Service Tax Or only Transaction Tax ?

[troubled soul]

In recent time there are so many controversy and discussion about the Personal Income tax. billionaire does not paid tax honestly this and that .
Sometime I thought "Why do not government abolish the income tax and just earn from service tax or vat tax "transaction Tax" ?"


As Example ,
Just abolish all kind of the tax , Just take small money from every Transaction .
As Stripe charges for every transaction .
Government Take small money from each any every banking transaction.
Government can generate enough money to run a country.
As amount is small I do not think that anybody have problem with that.
No tax heaven. No ever lasting mouse and cat fight .



What are your opinion about this ? Is it practical ? What are its pro and cons?

Is it viable or Am I day dreaming ?

 

[ih8socialism]

Well, this would prolly hit the poor people or companies with loads of losses since they don't have any money nor do they pay taxes lol

 

[FixieHartmann]

Well, if it works like a VAT it could be perceived as unfair for people who earn very little.

Example:
Let's say the VAT is now 40% in AfVATistan.

Person A makes 100k a year, Person B makes 10k a year.
Expenses for groceries for both are 5k / year.

In that scenario both A and B pay 2k in VAT for groceries, however for A this is like a 2% tax while for B it is a 20% tax.

This is of course highly simplified but a system like this where goods that everyone needs are taxed the same for everyone highly favors high-income people.

Nevertheless, I would definitely love a system which only taxes consumption, not income. I don't have a problem with people earning loads of money, however when someone like Abramovich has 5 mega yachts his CO2 footprint of course becomes insane.

I think it would generally be a good incentive for society if people were more encouraged to produce value instead of consuming. Of course the main problem with that is that most western countries are build on the principle getting people to consume as much as possible.

 

[troubled soul]

No Dear , My Idea is to give (to government ) like say 1% on every transaction .

Same in You example Person A makes 100k a year, Person B makes 10k a year.
Person A receive 100k in his bank account so he will be 1k.
spend 5k , another 50
Total Tax for him = 1050

For Person B receive 10k in bank account =100 tax
plus spend 5k =50 tax
Total tax for him=150

This is my proposed system.
For this system even 1% is high,

I am suggesting each and every transaction is taxed , small amount like stripe charges for every transaction.
Hope I prove my point.

Sorry for my bad english.

 

[Martin Everson]

As Example ,
Just abolish all kind of the tax , Just take small money from every Transaction .
As Stripe charges for every transaction .
Government Take small money from each any every banking transaction.
Government can generate enough money to run a country.
As amount is small I do not think that anybody have problem with that.
No tax heaven. No ever lasting mouse and cat fight .

Where I live in Bahamas we have no income tax. Government gets its money from import duties etc. As everything is imported this makes goods very expensive. However one can lower their consumption to save money.

When it comes to the issue of the poor being unfairly disadvantaged by a VAT/transaction tax well it can be made a progressive VAT. In the same way taxes on luxury cars and goods exist. A base line low transaction tax can exist which is ramped up to 100% VAT or more for luxury goods

 

[FixieHartmann]

No Dear , My Idea is to give (to government ) like say 1% on every transaction .

Same in You example Person A makes 100k a year, Person B makes 10k a year.
Person A receive 100k in his bank account so he will be 1k.
spend 5k , another 50
Total Tax for him = 1050

For Person B receive 10k in bank account =100 tax
plus spend 5k =50 tax
Total tax for him=150

This is my proposed system.
For this system even 1% is high,

I am suggesting each and every transaction is taxed , small amount like stripe charges for every transaction.
Hope I prove my point.

Sorry for my bad english.

Then the question is what constitutes a "transaction".

Say I move money from one bank account to another, should that be taxed? Probably not?!
Say I give you a loan and you repay me the same amount, should that be taxed (twice)? I guess not.

So it would have to be something like a VAT that only applies if someone buys anything. But what about companies, should they have to pay when the buy / sell goods? The don't pay VAT right now if the counter party is also a company.

So the devil really is in the detail.

 

[troubled soul]

Where I live in Bahamas we have no income tax. Government gets its money from import duties etc. As everything is imported this makes goods very expensive. However one can lower their consumption to save money.

When it comes to the issue of the poor being unfairly disadvantaged by a VAT/transaction tax well it can be made a progressive VAT. In the same way taxes on luxury cars and goods exist. A base line low transaction tax can exist which is ramped up to 100% VAT or more for luxury goods

Why big countries does not apply this logic in that country?

What are your thought about my proposed transaction TAX ?
Tax small percentage for every Transaction like Stripe Does. (Each and Every banking transaction )
Is it viable ?

 

[Martin Everson]

My Idea is to give (to government ) like say 1% on every transaction .

This will come with CBDC. There is no means of collecting such a tax while cash exists.

 

[FixieHartmann]

Where I live in Bahamas we have no income tax. Government gets its money from import duties etc. As everything is imported this makes goods very expensive. However one can lower their consumption to save money.

When it comes to the issue of the poor being unfairly disadvantaged by a VAT/transaction tax well it can be made a progressive VAT. In the same way taxes on luxury cars and goods exist. A base line low transaction tax can exist which is ramped up to 100% VAT or more for luxury goods

I am actually quite a big fan of this system. Don't tax income, only consumption and have high duties / taxes for luxury goods. Would be interesting if it could work for a big country like Australia / US / Canada.

 

[EuroKiss]

Well, if it works like a VAT it could be perceived as unfair for people who earn very little.

Example:
Let's say the VAT is now 40% in AfVATistan.

Person A makes 100k a year, Person B makes 10k a year.
Expenses for groceries for both are 5k / year.

In that scenario both A and B pay 2k in VAT for groceries, however for A this is like a 2% tax while for B it is a 20% tax.

This is of course highly simplified but a system like this where goods that everyone needs are taxed the same for everyone highly favors high-income people.

Nevertheless, I would definitely love a system which only taxes consumption, not income. I don't have a problem with people earning loads of money, however when someone like Abramovich has 5 mega yachts his CO2 footprint of course becomes insane.

I think it would generally be a good incentive for society if people were more encouraged to produce value instead of consuming. Of course the main problem with that is that most western countries are build on the principle getting people to consume as much as possible.

5 yachts move the economy, hundreds of people have worked on those luxury goods. You can tax them but you must always consider that it is the consuming that moves the economy, for that reason US had the strongest economy till now (2/3 from private consumption) and China is improving its internal consuming patterns to become the number one.

 

[troubled soul]

This will come with CBDC. There is no means of collecting such a tax while cash exists.

Ban Cash, Only Digital cash.
We are moving toward this . So many country reach cashless system specially Scandinavia country.

Then the question is what constitutes a "transaction".

Each and Every transaction, self to self , third party , loan It can be anything . Like crypto transaction fee.
In block chain miner get transaction fees. In my proposed system Government Gets that fees.

 

[FixieHartmann]

5 yachts move the economy, hundreds of people have worked on those luxury goods. You can tax them but you must always consider that it is the consuming that moves the economy, for that reason US had the strongest economy till now (2/3 from private consumption) and China is improving its internal consuming patterns to become the number one.

Well, of course consumption drives our economy, I don't question that.

However the question is if this is the best way forward, as we know that for instance for fossil fuels the externalities are not priced in (The Hidden Costs of Fossil Fuels).

Let's look at Abramovich's fleet.

The Azzam (biggest private yacht in the world) uses 13 tonnes of fuel / hour on full speed. Let's say the yachts of Abramovich only use 3 tonnes / hour because they are smaller and of course not running on full speed all the time.

With this we get:

-     3 Tonnes fuel / hour
-    72 Tonnes fuel / day
- 26280 Tonnes fuel / year

26280 Tonnes are 26,701,700 Liters which are 7,053,842 Gallons.

If we assume that Abramovich has 3 of these yachts we arrive at about ~75M Liter / ~20M Gallons of fuel consumption just for these yachts per year.

The average American (no. 1 in the world) uses 4.4L of fuel a day (https://www.globalpetrolprices.com/common_images/articles/52/gas_consumption_per_capita_rankings.PNG), so 1606L / year.

That means that Abramovich's yachts consume as much fuel as 47.000 Americans.

Nevertheless, the tax that Abramovich pays per liter is the same that the average American pays while the impact of his behavior on the environment is like 50,000 times worse.

I don't think that states should have the power to forbid this kind of consumption / behavior, but they should definitely discourage it by applying a massive luxury tax to offset at least part of the damage it causes.

 

[FixieHartmann]

Ban Cash, Only Digital cash.
We are moving toward this . So many country reach cashless system specially Scandinavia country.



Each and Every transaction, self to self , third party , loan It can be anything . Like crypto transaction fee.
In block chain miner get transaction fees. In my proposed system Government Gets that fees.

Like I said before, why should I pay a tax if I just move money from one bank account to another? The money doesn't change hands, so it shouldn't be taxed.

 

[JustAnotherNomad]

I would prefer to just be left alone. I don't need anyone to plan for me how the perfect "system" could be and how it would be for my own good if my bank takes away money that hits my account. No, thank you, just leave me alone, please.

Also governments don't have an income problem, they have an expense problem. Politicians will always increase spending, either because they hope it will increase their chances of being reelected or because they are so narcissistic that they think they know better than everybody else how people should live their lives. That's why they always run out of other people's money eventually.

Look at a country like the UAE: 5% VAT, some government "fees" and that's it. Look at how this country has evolved. No political "activists", no BLM, no feminazis, no elections. I really hope it will stay this way.

 

[jjrapy]

let's go back to bartering to avoid the transaction fee

 

[troubled soul]

Like I said before, why should I pay a tax if I just move money from one bank account to another? The money doesn't change hands, so it shouldn't be taxed.

Every system has cons. But In reality If We impose this like block chain it will be small there will be no proble.

I would prefer to just be left alone. I don't need anyone to plan for me how the perfect "system" could be and how it would be for my own good if my bank takes away money that hits my account. No, thank you, just leave me alone, please.

Also governments don't have an income problem, they have an expense problem. Politicians will always increase spending, either because they hope it will increase their chances of being reelected or because they are so narcissistic that they think they know better than everybody else how people should live their lives. That's why they always run out of other people's money eventually.

Look at a country like the UAE: 5% VAT, some government "fees" and that's it. Look at how this country has evolved. No political "activists", no BLM, no feminazis, no elections. I really hope it will stay this way.

Can not angry more.
UAE is not perfect , but with their policy It become a mecca for art, science and technology

 

[Martin Everson]

Look at a country like the UAE: 5% VAT, some government "fees" and that's it. Look at how this country has evolved. No political "activists", no BLM, no feminazis, no elections. I really hope it will stay this way.

All protests and all political parties are banned in UAE

 

[FixieHartmann]

Look at a country like the UAE: 5% VAT, some government "fees" and that's it. Look at how this country has evolved. No political "activists", no BLM, no feminazis, no elections. I really hope it will stay this way.

Well, of course you don't need massive amounts of taxes if 77% of the states income comes from oil exports (Economy of the United Arab Emirates - Wikipedia).

It is also a bit cynical mention these things as advantages. I don't doubt that they are advantageous for *you*, however I am not sure if most people that are working in the UAE would actually agree with you (Migrant workers in the Gulf Cooperation Council region - Wikipedia).

 

[troubled soul]

Can not we focus on transaction TAX ?
Do not divert to Dubai.

 

[FixieHartmann]

Every system has cons. But In reality If We impose this like block chain it will be small there will be no proble.

Can not angry more.
UAE is not perfect , but with their policy It become a mecca for art, science and technology

Let's see about that. In the last 50 years sharia law countries have not really been known for technological or scientific advancements (to put it mildly)..