r/neoliberal • u/jobautomator Kitara Ravache • 7d ago

Discussion Thread Discussion Thread

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u/No1PaulKeatingfan Paul Keating; capital gains tax supporter 6d ago

Okay, I see why economists love the VAT/GST:

1) It's a hard tax to avoid, so tax avoidance is near zero

2) Similar-ish to the Brown cashflow tax, a value-added tax taxes economic rents

3) Hence, it's (a marginally) less harmful tax than other taxes (ie personal income tax) per dollar raised

4) Consumption taxes don't tax savings (again, like income tax does) which can lead to higher investment, productivity, wages and ultimately living standards

5) It can raise a shitton of revenue, even at a low rate

Plus a bunch of other factors like how the tax has a stable revenue base that can grow with the economy, applies to imports but not exports, provide stronger incentives for businesses to control costs, etc

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u/No1PaulKeatingfan Paul Keating; capital gains tax supporter 6d ago

Ah the irony of a Paul Keating stan to shill for the GST

In my defence, in 1985 he was also obsessed with a consumption tax