If it happens to be regressive, then that can be solved by giving everyone $x. And then you recoup via marginal income/marginal sales taxes.
They're to collect money for the government so that it can do things (or just sit on the money if you're a king). King George didn't tax the colonies because he wanted them to stop doing things; he did it because he wanted the money. In more modern times, a government raises taxes to pay for new roads or whatnot.
Using taxes as punishment is just a nice benefit that the government can wield.
A lot of these schemes to “help the poor” in fact “cement feudalism” by destroying the middle class to the benefit of elites.
I would think an exponential function would easily prevent this.
Income taxes don’t have that, as they’re a progressive tax.
The idea you’ll have an “exponential function” in the tax policy is pure lunacy that’s not politically tractable, though.
Obviously this whole idea is politically impossible as it would result in huge wealth redistribution, but it is funny that with all the technological innovations, a simple exponential function for determining taxes is considered to not be feasible.
Your final point is a non-sequitur:
The objection to an exponential function isn’t the technical complexity, but the behavior of exponential functions. You’re just dressing up “seize the wealthy’s money” in fancy math.
Though, you’re also understating the complexity of having such a variable tax and the second order impacts you’re likely to cause.
Edit — replying here as I hit my posting cap:
We care because our goal is a prosperous society for our citizens, for which we need a robust and active middle class.
We don’t exempt those goods from taxes (as we do with the essentials). My point has been that your vision for taxes creates a bi-modal distribution between rich and poor by laying a heavy tax burden on the middle class, until they wither — essentially creating feudalism.
A healthy society (with progressive taxes) creates opportunities for the poor to advance their well-being out of poverty by not over-encumbering the path to a middle class life. Regressive taxes are antithetical to that.
I am not understanding this. Why would we care what the percentage of tax paid is as a proportion of income? Poorer people have already been helped by reducing sales tax rates for the amount of spend needed to ascertain a certain quality of life. If they choose to spend more, and a higher income person chooses to spend less, why would society care that the lower income person pays more as a percentage of their income?
Look at healthcare spending. Look at social safety nets. Look at defense. Odds are that any spending in an attempt to make VAT less regressive would wind up looking a lot like those and having most of the same problems because it would be subject to the same sets of perverse incentives from top to bottom.
Every time a new handout gets created, there is a predictable round of complaining from the fiscal conservatives, but fiscal conservatives make up only about 10-15% of Republicans and 3-5% of Democrats so inevitably the handout eventually gets passed, perhaps with a name-change or some token constraint, but then once established becomes normalized and permanent.
You could make the argument either way that this fall's more on the rich. They tand to have more bigger cars, bit then you could argue that the poor have older less efficient cars, but it isn't really aimed at wealth. I suppose the key is that any party can arrange their lifestyle to avoid being worse off.
You set the marginal rates, or the parameters of the function for determining the marginal taxes equal to however much is needed to cover the costs.
to avoid this, the refund would itself need to be progressive, giving back to some more than others, which sounds like a worse version of just progressively taxing in the first place
We constantly got clients who were newly rich and believed there were all sorts of tricks and loopholes that would allow them to avoid paying taxes. They'd come to us with ideas about trusts, shell companies, charitable organizations, loans, whatever, and inevitably leave frustrated and disappointed when they learned the really was no way to use their new wealth without the government first taking half.
Some states with sales tax (Texas and Florida come to mind) already do something like this by excluding groceries from their sales tax program.
https://taxfoundation.org/sales-tax-grocery-tax-exemptions/
I always try to advocate for KISS, keep it simple, stupid. Want to help poor people? Give them cash. Want to prevent political fighting about who constitutes poor people? Give everyone cash. And then take back based on marginal income/property/sales taxes.
I see the wisdom of removing tax on necessities. But after that it's essentially everyone's choice what they buy.
The issue seems to be that things that only the wealthy can take advantage of are under taxed.