Income tax vs VAT
by JackMack (2024-02-17 20:50:47)

In reply to: Well  posted by ufl

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Is a VAT considered regressive, progressive, or neutral? I honestly don't know, but my gut says "neutral" since it's based on consumption, not income. What's the expert view?


Regressive since low income folks
by ufl  (2024-02-17 20:54:49)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

spend a larger percentage of their incomes on taxable goods
Not if all transactions are taxed
by 88_92WSND  (2024-02-20 20:39:43)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

Better concepts include a refund or "pre-fund" of the tax value of a given standard of living, offsetting the basket of food, fuel, etc.
All transactions? You envision a VAT were we tax saving?
by ufl  (2024-02-21 08:19:50)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

People with low incomes save less. That's the basis for the regressivity.

Yes. I guess you could wed a negative income tax to a VAT and claim that the combination is less regressive or not regressive but the VAT part is still the VAT part.
You said "taxable goods". If I remember correctly
by 88_92WSND  (2024-02-22 20:32:41)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

the concept from the mid-90s under the "Fair Tax" label did not have a 'non-taxable goods' category. If you bought something, the transaction was taxed. If you paid for a service, the transaction was taxed.

Monthly Universal Basic income voucher pre-pays the cost of basic goods and services, so low income has a net zero tax burden at worst, net tax income possible.
Thanks
by JackMack  (2024-02-18 09:59:43)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Cannot reply

Prompted me to go online (because the answer surprised me), and I see your answer stated verbatim in a Tax Policy Center piece on this question. I hadn't though it through and was curious about the data that lay behind the answer, but the TPC answer made it quite obvious without the data.