Time to change taxation?

[Lacessit]

Taxation is a morass of regulation and loopholes in most countries. Tax evasion and avoidance are a national sport, facilitated by armies of tax lawyers and accountants.

 

Multinational companies park their profits in tax havens, using artificial loans with fiddled interest rates to minimize their tax obligations in the countries where they made the profit.

 

The average American family paid $17,902 in federal taxes in 2021.

 

In 2016 and 2017, Donald Trump paid $750 each year in federal taxes.

 

Other billionaires in America do the same. Quite legally.

 

https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

 

Consider the following: Every business has a profit and loss statement. Every expenditure is deducted from the income made selling goods and services. The net profit is the only component which is taxed. The business is allowed to depreciate the equipment it uses to generate income.

 

OTOH, the average joe is taxed on the gross salary or wage he receives. He cannot deduct the cost of the food he puts on the table to feed his family. He cannot depreciate the vehicle he drives, for work or leisure.

 

The answer IMO is revenue. Revenue cannot be hidden in tax havens, or have deductions against it.

 

It does not have to be a big tax. A bean counter in Australia calculated a 1% tax on personal income plus company revenue would balance the federal budget.

 

Jean Baptiste-Colbert:

 

"The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing."