Thread: Expenditure Tax.... the Gamechanger?

I don’t think your numbers are right but I’ll have to sit down and go through it. Not saying they aren’t but total revenue was $493B and tax was 25.3% of GDP in 2018 from what I can see.

Got some links to the data - I could be misinterpreting what you mean.

Cant see it ever happening,one mob will say it's the wrong thing to do,the other will say its fine.

And the polies will have to pay too much 'expenditure tax' on their $2M to $10M homes,and play things,cars,boats,planes,whatever.

If we could see the proper,honest costings it may work well,although many things may get double taxed.

Is this like a high GST & no other taxes?
So we are taxed on spending not earnings?
Jonesfam

not sure what you mean by high gst jonesfam , but yes, it would replace all other tax, based on what you spend , not earn.

Originally Posted by ramblingboy42

it would replace all other tax,

Just as GST was touted.

Originally Posted by ramblingboy42

not sure what you mean by high gst jonesfam , but yes, it would replace all other tax, based on what you spend , not earn.

What a fantastic way of getting the poor to pay even more tax

GST is exactly the type of tax you are proposing. But it is far from universal, with too many exceptions, and it only applies to final expenditure. (If you try to apply it to every step of expenditure, it has all sorts of problems - for example, consider the relative tax paid by a business that does everything in house compared to one that buys in parts - the former pays tax on the sale price, where the latter pays tax on both the final sale price and all the input prices. Similarly, an expenditure tax with no exemptions would see me paying tax when I deposit money in the bank, and again when I take it out.

The claimed advantage of expenditure taxes is that they have less of a distorting effect on the economy, and are simpler and easier to collect, and are harder to avoid than other taxes.

The problem is that unless you have a lot of exemptions like gst does they are politically unacceptable, but if they do, the revenue is not enough to replace other taxes.

And as far as getting the poor to pay more taxes, as a proportion of income, the poor already do.

Expenditure tax is a consumption tax. The issue with double taxation which exists with the current Consumption tax and all the leakages from an Expenditure/consumption tax such as on exports, health, food............... makes it a political beast which is unlikely to ever be supported in a democracy. The full G.S.T. law was ok- implemented with huge holes it was

So many great ideas just no real way of getting them put in place perhaps?