Irrational Attitudes to Taxation?

[darag]

Indirect taxes. These benefit the rich and are socially inequitable.

I disagree strongly.

Indirect taxes almost exclusively mean consumption taxes. Lowering VAT and raising income tax discourages (productive) working, punishes saving and investment while encouraging consumption. This is bad for the economy generally.

I'm not sure why anyone thinks people who have lower incomes are disadvantaged by a system which leaves them with nearly all their income (by taxing lower incomes extremely lightly) but which taxes consumption allowing them, if they wish, the opportunity to save. Unless you feel people on lower incomes are too stupid not to go out and spend all their money on fags and booze.

 

[shnaek]

Indirect taxes almost exclusively mean consumption taxes. Lowering VAT and raising income tax discourages (productive) working, punishes saving and investment while encouraging consumption. This is bad for the economy generally.

I'm not sure why anyone thinks people who have lower incomes are disadvantaged by a system which leaves them with nearly all their income (by taxing lower incomes extremely lightly) but which taxes consumption allowing them, if they wish, the opportunity to save.

Well said.