Re:Sam Altman and Andrew Yang talk UBI
by AnthonyMouse on Wednesday January 01, 2020 @10:32AM
(#21928370)
> If you're using a regressive VAT tax to pay for UBI you are not redistributing wealth
Sure you are. Joe Teach pays $5000/year in VAT and gets a $10,000/year UBI, $5000/year is being transferred to him. Carlton Moneypenny pays $50,000/year in VAT and gets a $10,000/year UBI, $40,000/year is being transferred away from him.
> much of which will be lost as the prices of goods increases to match equilibrium
But then you would collect more VAT at the same rate, which would fund a larger UBI. By the time that reaches steady state it's a wash.
On top of that, VAT is great for people who are in debt (i.e. the poor), because no more income tax means they can pay down their existing debt with money they would have otherwise lost to income tax.
> Amazon won't "pay the tax" it will pass the tax along in the form of higher consumer prices.
The party who pays more of the tax is the party whose alternatives have gotten worse instead of better. For an individual, saving has just gotten more attractive relative to spending, so Amazon will have to keep the price of that stupid knickknack lower in order to get people to still buy it instead of banking the money and collecting interest on it to spend next year.
Meanwhile it's now the case that the tax applies to Amazon and not just their smaller, less international competitors, so Amazon would start losing business to them if they don't keep prices low by eating more of the tax.
> If the primary concern is tax evasion, there are many ways to improve this while still maintaining progressive taxation.
Not really. The primary problem is that shifting profits to other jurisdictions with lower taxes is easy to do and hard to prevent, and then there are no "profits" in the jurisdiction with the progressive tax, which turns the "progressive" tax into a massively regressive tax since the richest pay nothing.
The best way to fix it is to make everyone pay the same rate (so the rich can't avoid it) and then make it progressive by giving everyone a fixed refund (UBI), which gives you the effective rate curve a progressive income tax is supposed to have except that international corporations can't avoid it by declaring profits in Ireland.
Sure you are. Joe Teach pays $5000/year in VAT and gets a $10,000/year UBI, $5000/year is being transferred to him. Carlton Moneypenny pays $50,000/year in VAT and gets a $10,000/year UBI, $40,000/year is being transferred away from him.
> much of which will be lost as the prices of goods increases to match equilibrium
But then you would collect more VAT at the same rate, which would fund a larger UBI. By the time that reaches steady state it's a wash.
On top of that, VAT is great for people who are in debt (i.e. the poor), because no more income tax means they can pay down their existing debt with money they would have otherwise lost to income tax.
> Amazon won't "pay the tax" it will pass the tax along in the form of higher consumer prices.
The party who pays more of the tax is the party whose alternatives have gotten worse instead of better. For an individual, saving has just gotten more attractive relative to spending, so Amazon will have to keep the price of that stupid knickknack lower in order to get people to still buy it instead of banking the money and collecting interest on it to spend next year.
Meanwhile it's now the case that the tax applies to Amazon and not just their smaller, less international competitors, so Amazon would start losing business to them if they don't keep prices low by eating more of the tax.
> If the primary concern is tax evasion, there are many ways to improve this while still maintaining progressive taxation.
Not really. The primary problem is that shifting profits to other jurisdictions with lower taxes is easy to do and hard to prevent, and then there are no "profits" in the jurisdiction with the progressive tax, which turns the "progressive" tax into a massively regressive tax since the richest pay nothing.
The best way to fix it is to make everyone pay the same rate (so the rich can't avoid it) and then make it progressive by giving everyone a fixed refund (UBI), which gives you the effective rate curve a progressive income tax is supposed to have except that international corporations can't avoid it by declaring profits in Ireland.