Bill Gates makes a case for consumption taxes rather than income taxes

in politics •  7 years ago  (edited)

Are income taxes bad?


Bill Gates and I agree that equality of opportunity is an ideal. Equality of consumption is also interesting conceptually and the idea put forward by Bill Gates is that it doesn't matter how much money he has in a bank account but how much consumption he is doing with that money.

Income taxes in my opinion are regressive. It punishes people trying to move up. I also think capital gains taxes can be regressive if applied to people who have either very little income or who don't consume a lot. This is worth discussion, but how would you choose to reform taxes if you had to pass a bill through congress and get it signed by President Trump?

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Without income taxes, how would the government collect all their data on our lives as easily as they do with income tax returns? It would get rid of most tax evasion issues. It would get rid of money laundering issues. In a nutshell, it would take a lot of control out of the government's hands. Something I can't see them doing voluntarily.

This might help.

It will be the only way forward when crypto has mass-adoption.

Little or no taxes and a withering state is another option.

The idea of the progressive tax is the concept that the wealthy have a social responsibility to the impoverished.

There are many flaws with the system of taxation and many complexities involved with income inequality. How long until we hear "Who knew the tax system could be so complicated?" Come out of some famous person's Twitter feed?

Yes, Taxation is "just paying interest on the Federal Reserve" this is the fundamental core of the National Debt, however that debt came from somewhere. The US bought highways, railways, libraries, parks, banks, automotive manufacturers, military personnel and equipment (the list goes on) with borrowed money. Borrowed from who? US! EVERY ONE OF US, OUR PARENTS, MOST OF OUR GRANDPARENTS! It is our money that the US borrowed and it's our money that's paying it back!

Even though that problem exists, we cannot simply keep inflating the debt to pay for the dollar (imagine $24,500 for a t-shirt) so we still have to generate a way to reclaim some of that capital. This is what our tax system does, it reclaims some of the debt to minimize the impact of inflation which is created by false scarcities.

Income inequality doesn't always come from hard work. I personally have worked 50 hour weeks with my spouse also working full time and, because of occupational inequality and geographic inequality, we were barely able to pay day to day bills. On the other side of the coin, a friend of mine works 12 hours a week and makes $1,000 to $7,000 per hour (she is a grant writer). So why should I have to work 4 times as hard and get so much less? Better still, a former friend was born into money and simply lives off of roughly $150,000 in INTEREST a month. So it's not as cut and dry as work harder to be more successful.

I have often been in favor of a tax on spent money, but not forwarded on to the consumer. In my vision, a system of corporate tax should fund the government and repay the people. This corporate tax could, of course, be offset through philanthropic efforts that relieve the government of financial responsibilities like providing healthcare, building parks, offering housing benefits, and job creation.

I could likely go on for hours ...

I find it interesting that you mention your friend's occupation, but not your own. Also, is inheritance somehow immoral in your opinion?

At the time I was a Bakery Manager for Cinnabon, performing many hours of physical labor, 10-18 a day, and my wife was a cook at Round Table Pizza, making minimum wage to keep up with high volume food orders. And no, I do not find inheritance immoral. When I received my own I paid tax for receiving it and considered it both repayment for the government benefits I have personally needed to use and a pay it forward to people less fortunate.

Edit Also my wealthy former friend is not living on inheritance, his parents are still alive

Okay, you write:

because of occupational inequality and geographic inequality, we were barely able to pay day to day bills. On the other side of the coin, a friend of mine works 12 hours a week and makes $1,000 to $7,000 per hour (she is a grant writer). So why should I have to work 4 times as hard and get so much less?

But you seem to neglect that there's a reason there's such an occupational inequality. For if there wasn't, you could easily drop that job and become a grant writer yourself, like your friend. A grant writer requires at least a bachelor's degree, whereas a bakery manager requires at least a high school diploma + maybe some experience. Even then, the average salary for a grant writer is about $44k while the average salary for $49k. This implies that your friend might have gotten some further education than a bachelor's degree, or that she was lucky (i.e. took advantage of an opportunity).

So why do you have to work "harder" to earn less? Because you didn't invest as much time into your education and/or didn't realize or take advantage of an opportunity (which usually means didn't take a risk).

In this case, my friend learned to write grants from her parents who had earned the education. Grant writers do not need any academic certification, they simply need to know where to look for grants and how to write the proposals (it's actually a relatively unskilled job).

A bakery manager doesn't even require a high-school diploma, but it does require years of practical experience (typically 5+) and subjects the worker to high-risk conditions such as heat exhaustion, burns, chemical exposure, fatigue, and a myriad of other health risks.

The difference in the reward is only in "perceived value". In our society we assign work that we perceive as being more valuable (College Education, White-collar, Executive ...) a higher value than we do for work we perceive as having no value (food workers, cleaning staff, cashiers ...). This inequality is so societally ingrained that many people assume the guy in a suit is more valuable than the one in Blue jeans and a torn t-shirt, regardless of their respective skills.

While many people are happy to devalue jobs based on opinion, I seriously doubt that just anyone could handle all of the requirements that must be met to "flip burgers". I've actually had executives in several of the kitchens I've worked and very few of them even knew how to use the industries most common machines.

Even if there was a disparity in skill set, why should my skills be worth any more or less than yours? I still had to learn the skill, practice and hone it to be competitive in the market I worked in.

BTW I am currently a Senior in my Bachelor's of Business Administration with multiple recommendations to Cal-Poly Pomona for a Master's with a focus in Entrepreneurial management and workplace equality

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It's our way to connect with the government and have an identity in their eyes

Bill Gates is seems to be really delving into a tax restructuring. Sadly we do need some tax system to maintain infrastructure. The one I particularly like was taxing automation. Lets face it, people as employees are VERY expensive so I don't blame businesses for wanting to replace me and you with an automated system. But, if you start putting the same taxes on those systems, then companies will bring back people and the money will go to people rather than a coorporate office. Big corp isnt stupid and they know if it was the same price to run a machine as it is a human, they will pick a human bc people want to interact with people.

The consumption tax is indeed interesting. I think it could be beneficial. I disagree that it would destroy the poor because it could be structured like NYC (ie less than 100 dollars in clothing is tax free) and if essential groceries were tax free, then I see where this would not hurt the lower income brackets. So just using NYC alone tells you that the registars are programmed to know what people are buying thus know what to tax people.

Nice thoughts! I like the idea of taxing automation, but there is no need for, or do I think any jobs that go to automation are ever going to come back. I watched this video on the economics of automation and universal basic income and this idea seems pretty logical to me, but the government does do some pretty illogical things a lot of the time. I'd be perfectly fine with not working a Job full of obligation and external pressure, I put enough pressure on myself as it is. I would much rather be on a platform like this being creative and intuitive, creating value for people any way I saw fit. Thank you for the inspirations.

Nice thoughts! I like the idea of taxing automation, but there is no need for, or do I think any jobs that go to automation are ever going to come back. I watched this video on the economics of automation and universal basic income and this idea seems pretty logical to me, but the government does do some pretty illogical things a lot of the time. I'd be perfectly fine with not working a Job full of obligation and external pressure, I put enough pressure on myself as it is. I would much rather be on a platform like this being creative and intuitive, creating value for people any way I saw fit. Thank you for the inspirations.

Yes, it seems to be effective approach as for choice beetween human resources and automation. There is something like this in Japan regarding foreign employees. If you hire someone from abroad, you HAVE to pay him much more then to local guy. In this case there is no reason to try to hire low qualified foreigners.

As long as the consumption tax is on par with what is being spent, i.e., 1% on milk, etc., 50% on a mansion, then that would offset the "hitting the poor" harder argument, and still fund social programs.

Oh, and NO STANDING ARMY!! That would save us TONS!!!

Like The Beatles said ~
"Let me tell you how it will be
There's one for you, nineteen for me
'Cause I'm the taxman, yeah, I'm the taxman "

Let's say an employee earns $500 before tax and has to pay 20% income tax. The employee will take home $400 and $100 will go to the taxman. If the employer paid that $100 income tax instead of the employee and paid the employee $400 it would make no difference to the employer, the employee or the taxman. Income tax is therefore an indirect business tax on human productivity.

So, why do employers pass this tax burden to employees? The answer to that is simple. When businesses replace human labour with automation, they no longer have to pay that tax either indirect or directly and therefore the government lose out of the tax revenue and society is poorer because of it.

Income tax is an indirect business tax on human productivity but what is required is a tax on the productivity of both humans and machines so that the government doesn't lose tax revenue as businesses automate. That can be achieved with a direct productivity tax on businesses that would replace various taxes that businesses already pay (such as income tax).

The productivity tax would be progressive like income tax with the business' productivity determining its tax band and rate. Productivity can easily be restated as the amount of money you earn from every $1 you spent, therefore, those who make the most money from every $1 spent would have the highest tax rates.

This is how you tax automation to pay for a UBI which will be essential as society automtes.

Personally I prefer a flat tax on all income with no exemptions. Everyone will feel the same burden. Consumption taxes hurt the lower income people who spend everything just to survive

So in order to help the poor & middle class he's going to replace the income tax with a consumption tax that will most definitely destroy the very people he claims it will help. Fuck him.

  ·  7 years ago (edited)

Income Taxes are unlawful. They where never meant for the man and woman.
The Founding Fathers wrote this in to law.

I left a video above for brendanwenzel it explains what is going on. I have not payed income taxes in 27yrs.

There is no law that says a man has to pay income tax.

There are many videos on this. Statutes and Codes are not law. The STATE nor the IRS has ever produce that law.
Exclusive - Former IRS Agent, Sherry Peel Jackson Exposes Income Tax/Federal Reserve Connection

Sherry Peel Jackson is awesome!

I prefer a negative income tax and a consumption tax if you must tax anybody at all.
Taxation is theft.

I see you are also a man of culture.

Income taxes are there to pay for the interest on the national debt held by the banks....

Its just slavery @dana-edwards , neofeudal slavery

Feel free to elaborate deeper.

A very long video, but watch the first bit...

Taxes of any kind are unconstitutional from an American perspective. The founders of the nation had a giant Tea Party in Boston to express their displeasure of any form of enslaving taxation.

Either all personal income (earned and unearned) should taxed at the same rate or maybe just replace all personal income taxes with consumption taxes.

income tax is not bad,unless u pay the proper amount of tax which is flexible per person,
but in other ways its nothing but the government looting more money from common people and putting in the name of"identity of the person" and I feel that is bad..!!
but a very nice post...!!
very interesting topic to discuss about..!!
have a nice day..!

Taxation is theft!

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I think the idea of forced taxation needs to be rethought... as well as its role in the financial system and the countless perverse incentives that are created. Our planet is at or past carrying capacity and viral consumption is at the root of that existential problem. A finite but infinitely divisible currency like Bitcoin is causing a conceptual reset in the zeitgeist. About friggin' time!!!

Wealth tax is the way to go - with proceeds going to help the poor and needy. It's the only way to effectively redistribute wealth. Income taxes breed inequality regardless how progressive they are.

The Gov like us to report every year. It is best for everybody to do it . You do not Uncle Sam to come after you.

interesting spin

The income tax is the 2nd plank of the communist manifesto. On that fact alone we shouldn't have one at all.

If the govt. is stealing its money out of your paycheck before it even reaches your hands, you're a slave.

Don't understand my bad attitude? Start here: http://www.freekentucky.com/the-must-readwatch-page/

When you make a blanket statement like bill has made here some questions arise. Who determines consumption? What are they looking for? How do they get their information? Are their incentives that impact people right away to become less of a consumer? But I have a bigger question. Instead of "fixing Taxes" Why do we even need tax? Why can't every service just be what you choose to pay for? There's a lot of money people have drained from their paychecks that they would never agree on paying for. It should not be mandatory it should be optional and their should be competition in every service.

He means inflation? Because I come from a country where that already happens and... is not necessarily working.