Post Your Economic Platform Here

[mvd10]

In my own country (ORANJE BOVEN!!!!!):

- Significantly deregulate the labour market and reduce the power of labour unions
- Tax reform. Harmonize VAT rates, get rid of most deductions (especially the monstrosity that is the mortgage interest deduction) and use the revenue to slash income tax rates and raise the "arbeidskorting" (basically a tax credit for labour income). Cutting taxes for lower income workers should be a priority, though not by raising taxes on high incomes since they are already overtaxed in the Netherlands and most of Europe. Replacing property taxes and stamp duty by something like a land value tax also is an interesting idea.
- Invest more in R&D. Private investment usually is more efficient than public R&D investment so the money should go to a R&D tax credit for businesses.
- Cut corporate income taxes. Ellminating/limiting the corporate interest deduction and using the revenue to further cut corporate tax rates also should be on the table. Or you could push for an equity deduction like in Belgium but that would cost extra revenue. Anyway, reducing the tax system's bias for debt over equity should be a priority.
- Deregulate most of the rental housing market
- Luckily there is some budgetary room for tax cuts/investments but we shouldn't get ahead of ourselves (like most political parties...) so some spending cuts probably will be necessary to keep it fiscally responsible. And I guess some cuts to the safety net could be helpful to increase work incentives, but doesn't mean that we should tear it apart like FvD/VNL are suggesting.
- FREE TRADE. Get the EU to pass TTIP and similar trade deals ASAP.

I know this most of this neoliberal™ wishlist won't happen in the next coalition (or ever) but I hope the VVD atleast tries to show why I voted for them.

My wishlist for the US probably isn't much different
- Reform social security and medicare to reduce long term deficits
- Move to a more consumption-based tax system like the Bradford X tax (it should be revenue neutral)
- Massively expand the R&D tax credit (could be paid for by a carbon tax)
- Massively invest in infrastructure (American infrastructure sucks)
- Reform Sarbanes-Oxley and Dodd-Frank, but I doubt you can find much useless regulations there.

Anyway, the X Tax would basically be a consumption tax. Corporate taxes would be border-adjusted (NO THIS ISN'T PROTECTIONIST), the corporate interest deduction would be eliminated (but interest income also wouldn't be taxed) and capital investments can be fully expensed instead of depreciated over multiple years. This basically would change the corporate tax in a VAT with a wage deduction, which is much more efficient than the current corporate income tax.

For the invididual side normal income would be taxed progressively (like today), but capital gains, dividends and interest would be exempt from taxation. I guess you could recoup any lost revenue with a VAT. The problem is that it would be a fairly regressive tax plan, but that can be solved by further raising the VAT and using the revenue for tax cuts for lower and middle-class households (like cutting regressive payroll taxes or providing rebates).

[mvd10]

Technically you could implement a progressive consumption tax, which basically is an income tax with a deduction for savings and loan repayments (income + loaned money in said year - savings - loan repayments basically is consumption). Then you could apply a two rate structure. But a progressive consumption tax would be quite hard to implement as nobody has ever done it before AFAIK, and we'd have to track all our financial transactions.

European countries don't really have a sales tax btw, they have a VAT which different (though in the end it also taxes consumption). A VAT is a lot harder to avoid than a sales tax.

You do know you can't do FTA's with individual EU countries like France or Ireland right? It's either the whole EU or nothing.

The basic income doesn't look like a good idea with the sudden phaseout. It probably would be better to settle for something lower than doesn't phaseout or phases out more slowly.

[mvd10]

Technically you could implement a progressive consumption tax, which basically is an income tax with a deduction for savings and loan repayments (income + loaned money in said year - savings - loan repayments basically is consumption). Then you could apply a two rate structure. But a progressive consumption tax would be quite hard to implement as nobody has ever done it before AFAIK, and we'd have to track all our financial transactions.

European countries don't really have a sales tax btw, they have a VAT which different (though in the end it also taxes consumption). A VAT is a lot harder to avoid than a sales tax.

You do know you can't do FTA's with individual EU countries like France or Ireland right? It's either the whole EU or nothing.

The basic income doesn't look like a good idea with the sudden phaseout. It probably would be better to settle for something lower than doesn't phaseout or phases out more slowly.

VAT & Sales are kind of similar. Maybe we should have this discussion later Progressive income taxes have been implemented in terms of different goods being taxed at different rates. Like say Luxury Cars at rate X, soaps & all other items at rate Y. Farm & food products have been taxed at 0% at multiple countries.

But AFAIK, it has nothing to do with the income level. You are talking about say income tax credits for consumption which people will get? But do you keep track of everything, all transactions, show proof & get a rebate? Who verifies this? How many people do you need to monitor this? There is also a gigantic scope for loopholes, corruption & individual discretion. What about those who are not paying any income taxes or children & their consumption? Tax payers will be sometimes at the mercy of accountants & lawyers.

There will be mass fraud in items sold. People will sell & get return illegally maybe to take advantage of the loopholes & what not. This is like opening a hornet's nest & is a crazy idea which rightfully hasn't been done.

Are you talking about the progressive consumption tax? People basically would report their income and deduct their net savings. What's left is consumption. So if you earn 75k and your net savings are 10k (I'm dropping some very random numbers) your taxable income is 65k, but there could be a 0% rate for example. I think this is the only possible consumption tax where you can exempt poor people. But like I said, nobody has ever tried this before, and keeping track of savings/stock market investments will probably be confusing (but then again, America's current tax code also is confusing...).

[mvd10]

Technically you could implement a progressive consumption tax, which basically is an income tax with a deduction for savings and loan repayments (income + loaned money in said year - savings - loan repayments basically is consumption). Then you could apply a two rate structure. But a progressive consumption tax would be quite hard to implement as nobody has ever done it before AFAIK, and we'd have to track all our financial transactions.

European countries don't really have a sales tax btw, they have a VAT which different (though in the end it also taxes consumption). A VAT is a lot harder to avoid than a sales tax.

You do know you can't do FTA's with individual EU countries like France or Ireland right? It's either the whole EU or nothing.

The basic income doesn't look like a good idea with the sudden phaseout. It probably would be better to settle for something lower than doesn't phaseout or phases out more slowly.

VAT & Sales are kind of similar. Maybe we should have this discussion later Progressive income taxes have been implemented in terms of different goods being taxed at different rates. Like say Luxury Cars at rate X, soaps & all other items at rate Y. Farm & food products have been taxed at 0% at multiple countries.

But AFAIK, it has nothing to do with the income level. You are talking about say income tax credits for consumption which people will get? But do you keep track of everything, all transactions, show proof & get a rebate? Who verifies this? How many people do you need to monitor this? There is also a gigantic scope for loopholes, corruption & individual discretion. What about those who are not paying any income taxes or children & their consumption? Tax payers will be sometimes at the mercy of accountants & lawyers.

There will be mass fraud in items sold. People will sell & get return illegally maybe to take advantage of the loopholes & what not. This is like opening a hornet's nest & is a crazy idea which rightfully hasn't been done.

Are you talking about the progressive consumption tax? People basically would report their income and deduct their net savings. What's left is consumption. So if you earn 75k and your net savings are 10k (I'm dropping some very random numbers) your taxable income is 65k, but there could be a 0% rate for example. I think this is the only possible consumption tax where you can exempt poor people. But like I said, nobody has ever tried this before, and keeping track of savings/stock market investments will probably be confusing (but then again, America's current tax code also is confusing...).

That wouldn't be really "progressive" though, would it?

I mean, yes it would in so far as the more you spend the more you are taxed - but it would still be quite regressive when related to income, as people on higher incomes save a much higher proportion of their income, meaning that a lower proportion of their income would be liable to the consumption tax.

In any case, I think lots of countries have somewhat similar mechanisms already existing in the income tax code - in deductions for mortgage interest, or pensions or whatever.

You could raise rates for the very wealthy to 80% or higher if you want (and capital gains would be taxed as normal income because it would be a giant subsidy for wealthy people otherwise), and you could also implement rebates. And it's quite different from gimmicks as the mortgage interest deduction. Under a progressive conumption tax you would be able to deduct all savings, investments in stocks and loan repayments. Meanwhile you would add loans to your taxable income (though I guess there will be exceptions for things like mortgages because it would be a complete political non-starter otherwise). It basically would be an income tax with a 401K deduction for all savings. But I do think nobody will ever implement it. The thing most people like about it that you can make it as progressive as you want while not taxing savings and investments, but to make it progressive you would need to raise rates to 80% or higher for wealthy people. Their taxes might not be any higher than before and economically it would be very efficient despite the high rate (according to the economists who think that consumption taxes are more efficient that other taxes atleast, I guess it's valid to think that's not the case), but try to explain an 80% tax rate to Americans. And you would need to keep track of a lot of financial transactions. The transition issues would be huge too.