I don't like taxes. I often feel strongly that my government is spending too much and unwisely. Yet there is a valid role for government and therefore for taxes to pay for that valid role. In our Province of British Columbia there is now a vigorous debate regarding the increasing use of a consumption or sales tax.
There are two broad targets of taxation. Tax income i.e. productivity, or tax consumption.
My view is that an income tax tends to inhibit productive activities. I can reduce my income tax by working less. From a broad social perspective this is unwise. An additional factor is that income taxation is an incredibly complex mechanism that absorbs an inordinate amount of time and resources.
A consumption tax tends to inhibit consumption. While much of consumption is on necessities, our modern society has drifted to consumption of non essentials. I can reduce my consumption tax by reducing my consumption and I will focus on the non essentials when doing so. The collection of consumption taxes is relatively straight forward when compared with the income tax.
Yes we must be concerned with those on very low income who can barely pay for necessities. This is best done by a generous social support network.
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