The government needs a certain amount of revenue. If some people get away with cheating on their taxes, then the tax rates for everyone else need to be higher to get that much revenue.

Income tax should be abolished though. Wealthy people can avoid it easily (get 1 USD wage as CEO and remainder in stock, for example).

Only consumption and wealth should be taxed. Wealthy people tend to consume more anyways. For some goods & services (energy consumption for example) a progressive tax rate might be appropriate, with tax exception for people who consume the least (as poor tend to do).

Luxury goods and services (private planes and yachts, luxury car brands, etcetera should also have a higher than normal tax rate, since for wealthy people the barrier to buy would still be low and poor or middleclass people can’t afford such goods and services anyway.

A system without income tax could also result in very simple tax reporting for most people, an additional benefit.

Being paid in stock does not eliminate your income tax; you still owe income tax on the fair market value of the stock.

In practice, consumption taxes are extremely regressive.

Firstly, because people who earn less necessarily have to spend a much higher proportion of their income to stay afloat.

Secondly, because higher earners tend to spend their money on categories that are typically exempted (like healthcare, education, investments, political activism, real estate) -- and things that are out of the easy reach of taxation, like international travel.

Consumption tax is also logistically quite expensive, because it requires every business to continually and constantly maintain records on all sales and returns; the recording for payslips is comparatively trivial. Three compliance burden is magnified by incredibly complex rules which often require teams of experts to evaluate, exactly because of the kinds of "luxury" carve outs you're already identifying seem warranted.

Income tax reporting does not need to be hard for most people. The top 1% of earners cover almost 40% of revenue; the bottom 50% cover only 3%. We don't need to make everyone file and pay income taxes each year; we could do just fine with only 1/10th of Americans filling. The pain of income tax is just a contrivance in the name of "fairness" to make regular people hate the tax process and support policies that would significantly alleviate the well-offs tax burden. Policies like exchanging income tax for sales tax.

Every business needs to continually and constantly maintain records on all sales and returns already, at least in all richer countries.

> get 1 USD wage as CEO and remainder in stock, for example

This is usually not possible. In Denmark you are taxed the same whether you receive your payment in stock or money. When you receive stock, you are taxed on the value of the stock at receive time -- obviously this is awful for receiving grants in a startup where the paper value is high, the stock is iliquid and the risk is substantial.

I think where the rich really benefits are the equity line of credit (ELOCs), where they effectively move money around without generating taxable events -- usually for very small interest payments.

Those ELOC schemeshave been clamped down on _hard_ in the last decade to the point of not really being a thing anymore

The real benefit to the rich is capital gains rates are significantly lower than income tax rates in many places, so anyone who is paid via capital gains pays significantly less tax. The income tax over 150,000 in the UK is 45% plus 3% for national insurance, and capital gains is a flat 20% for someone on that income level.

The point is that most taxes except wealth and consumption taxes are very easily avoided by wealthy people. Perhaps even taxes on wealth are hard, since wealthy people can just create some kind of charity and move most of their wealth into the charity.

Make the charity fully controlled by the family and it's a great way to protect ones wealth. Most of the income can be spend on stock purchases and perhaps <1% of the yearly profit can be spend on the actual charity, while another big part of the profits can be used to provide secure income for family members and friend working for the charity. Also, it's a way to avoid inheritance tax and to prevent someone running off with part of the wealth after a divorce.

Taxing income is in my opinion both unethical and rich people can avoid tax on most of their income anyways if they put in a little effort.

> while another big part of the profits can be used to provide secure income for family members and friend working for the charity.

Income which you need to tax. So you just jumped through another hoop before having to pay income tax.

> Wealthy people tend to consume more anyways.

They would pay more consumption tax but pay less percentage wise, because wealthy people save more than poor people.

Raising consumption taxes will be regressive because poor people spend all their money on food, heating and other consumption.

What if we only tax luxury goods?

There's only so many people who buy a Ferrari or an expensive handbag, and they only buy so many of them before they're done buying.

Taxing property perhaps would work. Or inheritance taxes. Big resistance on those for obvious reasons.

Then people import them.

The system needs some sort of pressure to force the government to work leaner.

Currently there is no reason for them to be conscious about that when every moment of my life incurs a taxable response not to mention their response to me even forgetting to pay amounts as paltry as $1000 is utterly excessive.

Funny the amount of effort they put into that yet how much effort is being put into keeping spending in check.

Best description I read about government needing revenue. Is really the government doesn't need money as much as it needs a way to devote some portion of the economy towards public goods.

Someones got to consume less. Everyone thinks it should be the other guy. Wealthy have power so they are always shifting the burden to the middle class and the poor.

"Is really the government doesn't need money as much as it needs a way to devote some portion of the economy towards public goods."

That much always seemed obvious to me at the federal level. For state/municipal governments there's at least some argument they do actually rely on the revenue, as they can't just go ahead and print/issue more money as needed.

It acts as a "pre-emptive" tax shift. If more people pay taxes there's going to be less pressure on the government to set an ever higher tax rate, because now they receive more money while levying the same amount.

If more taxes is the reason for this rule, then why try to justify it with references to terrorism?

Governments only get bigger, never smaller.

The theory is that broadening the tax base will create a large constituency with a vested interest in responsible government spending.

Or perhaps, more cynically, for lower taxes overall.

The really rich often have too much political influence on elections, they push to get their taxes reduced effectively. This happens in the us where the terrible supreme court ruling said money was speech, basically making it so rich people could give all they want towards political causes. This is very destructive.

The rich then get tax cuts for themselves that aren't applicable to regular people (like most all of us). Example of something we should address - bezos and musk get loans on their vast stock holdings. The loans aren't taxable. If their holdings slowly get higher in value, they never have to sell their stock to get that value (or they have so much they never get a margin call). They can pass on those stocks to their heirs which can reset the price. I wish we all had a billion in stock and we could get a few tens of millions in loans to live off of, never triggering a capital gains tax.

Another example is wealth taxes, which would be something along the line of Steve Ballmer has to pay 1/2 % of his wealth over 100 million or something every year. But what if he doesn't have ready available cash for that, people say, it's hard to value things. Somehow we could do it. And we never think about it, but everyone who owns a house has to pay a wealth tax every year! We normal people pay wealth taxes, the really rich should probably have to do it too. All the same arguments about changing values and not have ready money from an expensive asset applies to every home own in america who pays property tax.