Oh, I should note that progressive taxation is something I very much dislike. The accounting needs of tracking everything to figure out marginal rates is horrific. Linear consumption taxes are way simpler, and progressiveness (if needed, I’d argue it’s not) should be done by rebates or payments, not by tax rate differential.
Oh, I should note that progressive taxation is something I very much dislike. The accounting needs of tracking everything to figure out marginal rates is horrific. Linear consumption taxes are way simpler, and progressiveness (if needed, I’d argue it’s not) should be done by rebates or payments, not by tax rate differential.
I do agree it’s somewhat annoying accounting, but it’s like 1% of the annoyance of the current tax code.
I think the case for progressive taxes is reasonably good:
From behind the veil of ignorance I’d prefer more redistribution than I can get from an efficient flat tax.
Also see the minimizing-distortion argument in this post.
That said, I’d also be reasonably happy with something like a flat 50% tax + $20k UBI which I guess is the kind of thing you have in mind?
A progressive consumption tax doesn’t seem like too much trouble:
Income goes into your savings account. You make investments in that account.
You can’t consume anything from your savings account. You have to first move the money to a personal checking account.
The only number you report on your tax return is “How much money did I move into my personal checking account?”
To me this seems like quite plausibly less accounting burden than everyone who makes anything charging a VAT.