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IRS braces for $500bn drop in revenue as taxpayers skip filings in wake of DOGE cuts
(www.independent.co.uk)
this post was submitted on 23 Mar 2025
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Economics
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Oh yes, because eliminating groceries and housing from the consumption tax hurts the poor so badly because the poor need to buy five cars and ten yachts, etc.
I honestly have no idea what you're trying to say. No one is talking about poor people buying five cars and yachts. I'm talking about how when you're poor, and you're trying to make what little you have cover (for example) clothing, paying $10 in taxes is a bigger portion, and thus hurts more, than if you were rich and had to pay the same tax.
Do you know how money works? How the more money you have, the less each dollar matters?
What I'm attempting to say, and apparently not getting across properly, is that if the common day-to-day items that you need to live your life are exempt from the consumption tax, then the poor people would never have to pay it.
If food was exempt from the consumption tax, then nobody would have to pay the consumption tax, because everybody eats food. Both rich and poor people.
Another example would be shirts. How many new shirts does the average person need per year? Set the consumption tax to apply to any purchase of shirts more frequently than that. If a person needs two shirts per year, then those two shirts would not be taxed, and the third shirt and beyond would be. So you still get shirts, and you don't have to pay the tax.
You need a new car, say once every 10 years, and you can buy one car every 10 years without getting the consumption tax. But if you want more than one car in that time frame, then you pay the consumption tax, etc.
Mind you, this is if we agree that taxation is needed at all, anyway.
And who would exactly make sure that you are not going over the amount of shirts to dodge the consumption tax? With no IRS and without 99% of the government I assume nobody???
That's a good point. Which is why it's probably a better idea to just have the consumption tax apply to everybody equally instead of different levels, because otherwise you would end up creating a surveillance state. Well, not like we already don't have one, but still, that's a different story.
If a poor person needs a new shirt, they will go buy a shirt and wear it until they can't anymore. Whereas if a rich person goes, they will buy 10 shirts instead of just one. So the poor person gets hit with the consumption tax and the rich person gets hit with 10 times the consumption tax.
A poor person would buy a car, say once every ten years, and pay the consumption tax one time, where a rich person goes out and buys ten really expensive cars, and not only pays the consumption tax on the car itself, but ends up paying an extreme amount more because of the branding of the car. The poor person buys a Honda Civic to get them to and from work, where the rich person buys a Bugatti.