Is it more moral to tax production, or to tax consumption?

Morality has nothing to do with taxes.

Income. You can have a fairer tax by using a graduated schedule. Taxing consumption hurts the poor the most and lets the rich get off with little, when compared to their net worth and income.

Why not consumption? People have to produce or they will die. Taxing production is thus a form of oppression. Consumption, at least at certain levels is a matter of choice. People could choose to regulate their own level of taxation by regulating their consumption. If rich people consumed more, they would pay more tax.

Why not both, on a progressive basis? Low incomes and the basics of life taxed at a very low rate. Higher incomes and luxury goods taxed at at higher rate. No one forces higher earners to buy luxury goods so such a system would encourage thrift.

It depends on what the tax is for. For example, if it’s a tax to clean up Superfund sites, tax the things that the businesses are doing that cause the environment to become so fouled up in the first place. This has the dual effect of (1) making the guilty pay for the effects of their actions, and (2) making such activity less economically appealing.

For a general tax that everyone pays into a kitty to get the benefits and security that a civilization provides, it should be both, to varying degrees based on (1) how much the individual can afford, and (2) how much of the public resources the individual uses.

@laureth Great answer!

It is more moral (and/or logical) to tax general consumption, than to tax the working poor’s production.

It is more moral (and/or logical) to tax general production than it would be to tax food, healthcare, or a first home.

It all depends on how hard the tax hits the particular taxpayer. Some people have all the money in the world. Some workers can’t even buy food or medical insurance because they don’t make enough money to properly live in the area where their job is.

And tax laws should acknowledge this.

An income tax is only moral when it strikes only those who can easily pay it.
A sales tax is only moral, when it’s not applied to your food, your first car, your first home, and your healthcare. If those exceptions were made to a federal sales tax, then the sales tax would be a great thing because it would only hit those who choose to be hit by it (those why buy needless material items, generally).

@Kraigmo Car? You would exempt cars? WHen there’s perfectly good public transportation around? That’s not moral to me. And food? Caviar is exempted? Foie Gras? Premium chocolate? That’s not moral. People don’t need those things. In fact, the only food people need is a loaf of bread and some tofu and a few green vegetables.

Oh, and homes? Anything more than the minimum necessary to keep a roof over your head should be taxed, or that’s no moral.

And what about vacuum cleaners? Or at least brooms. You have to clearn, right? It’s not moral to have people living in pig stys. Or is it?

@wundayatta , in most cities there’s no “perfectly good” public transportation. Except maybe D.C. and New York.

And the only reason not to pick and choose which foods to tax… is because it would be logistically expensive and chaotic.

And the other things you say are also valid points, but they don’t negate the importance of my point: The current tax system doesn’t judge people by how hard the tax hits their ability to live a basic life. The proposals I made are better than the stupid status quo, which seems to reward those who don’t work, and the filthy rich, while punishing everyone else. But perhaps there’s even better policies that would make my proposals looks stupid by comparison. Nothing intelligent is being introduced by the knownothings we elect, however.

1. You cannot legislate the poor into prosperity, by legislating the wealth out of prosperity.

2. What one person receives without working for…another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it.

5. When half of the people get the idea that they do not have to work, because the other half is going to take care of them, and when the other half gets the idea that it does no good to work, because somebody else is going to get what they work for, that is the beginning of the end of any nation!

#2 and #5 sure sound like a couple of premises behind the Labor movement, @zensky.

However, what #4 misses, is the velocity of money. Let’s say you have Richie Rich, who can only spend so much money on things like food, cars, and mink faucets, that he just decides to stuff a bunch of leftover money in a box under his bed. It’s doing nobody any good there, including Richie, unless he’s saving for something big, like a mink showerhead. Anyway, let’s say instead that it’s taxed away (the new “under bed tax”) and instead it’s used to pay Joe Sixpack to rebuild an aging bridge. Not only is there a new bridge to help Richie get his goods to market, Joe will also have a dollar to buy some of those goods. And the cashier, who will keep her job because more Joe Sixpacks are buying goods, will have money to spend,too. It’s the Keynesian multiplier, and it’s real. And all those people are wealthier now that they taxed that dollar out from under Richie Rich’s bed.

#3 is amply demonstrated in my example up there, but I’d say that it’s not necessarily always a bad thing to “take from someone else” in that circumstance. How did Richie get so rich? Because Joe Sixpack and Betty Cashier buy his goods, pay for his infrastructure, and generally make this a good place to do business. He didn’t get there in a vacuum, and it’s worth paying for, to keep it good for everyone.

You had me at mink faucets.