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(Apologies for US-centrism in my description, although I think the idea itself could be applied internationally.)
Many locales fund desirable public works through sales taxes. Online businesses whined their way out of having to pay sales tax on the grounds that it was too hard (?) and that sales
taxes across the country aren't their problem.
If sales taxes are applied to any atoms sold in or delivered to a zipcode, then different locales can choose different levels of service, without major free-rider problems - I see some possibilities, but most of them make it harder to get delivered goods, so I think they'd be reasonably self-correcting. Since zipcode is in any record of a delivered transaction, this really shouldn't be hard for the sellers. We might have to jigger the demarcation lines slightly, if there are cross-county zipcodes, etc., but it seems workable.
I don't want to tax the sale of pure bits, since I want to encourage humans to amuse themselves with anything of which there is innately enough to go around.
Green taxes
http://www.ilsr.org/ecotax/greentax.html Tax only what harms the polity. [hello_c, Sep 06 2000, last modified Oct 05 2004]
[link]
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I'll avoid sales tax by just having the protons and neutrons shipped (I wonder if Amazon can do this?) and reconstitute them into atoms with electrons from a small DC power supply. |
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I suppose you have to tax atoms sold in a zip code to local zipcode denizens.
Otherwise you'd create strange eddies by having manufacturers
import raw material and sell it
tax free to the local community. |
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Hmm. I think smuggling may be the big problem. The alternative would be some unholy merger of the IRS and the post office, which is too scary for words. |
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Sales taxes aren't collected by the IRS... we *already* tax atoms sold within a zipcode/physical area, at whatever rate the area considers necessary to provide its public goods. |
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I want it to be possible for some people to live in nearly-libertarian, everything-privatized areas with no sales taxes, and others in areas with many public goods and whatever sales taxes they can tolerate. The current lack of taxes on goods from catalogs of various kinds lets companies in the former areas free-ride on the latter's roads, fiber investment, etc. I prefer taxes on atom-purchases to taxes on income because the former have more externalities for their locales to deal with. |
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"I prefer taxes on atom-purchases to taxes on income because the former have more externalities for their locales to deal with." |
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If you want a pay-for-use system, that's fine, but the problem with sales tax is that it's incredibly regressive -- probably the most regressive tax in widespread use within the US. Furthermore, a retail sales tax of the kind typically found in US jurisdictions imposes all sorts of accounting difficulty, because the same good may be taxed or not depending on whether it's bought for "consumption" or "production". VAT, for all its flaws, is somewhat easier to define. |
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Your "atom tax" would seem to imply that a good would be taxed no matter what its eventual use, so you'd tax the grain sold to the flour mill, the flour sold to the bakery, the bread sold to the supermarket, and the *same* bread sold to the consumer. That's an awful lot of tax, and that sort of structure creates artificial incentives to conglomeration -- if the farm, flour mill, bakery, and supermarket are all the same company, there would be much less tax paid. |
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Politicians are also generally unable to resist taxing different goods differently. For example, it's generally unpopular to tax basic foodstuffs, but easy to get away with very high "sin taxes" on cigarettes and liquor. |
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If you want per-use payment for infrastructure, then institute fees. Charge people to use the road, charge people for water, charge people for electricity. Sales tax really isn't the way to go. If you want to support "public good" projects that everyone indirectly benefits from (like defense), then I would argue for progressive income or property taxes. |
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But: Fees are also regressive, or really complicated to collect. Income taxes seem to encourage wierd inefficient perks and quirks in pay, like the US health insurance system. And the grain-flour-bread problem must already occur in bricks-and-mortar sales, so either we've adapted or there's a loophole. (The latter, I think: I've filled in plenty of order forms with a wholesale-or-retail? tax option.) |
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I've added a link to an essay on green taxes; applying green taxes would be better than this idea, which came up entirely to ameliorate some of the harms from not taxing Internet commerce where one would tax local commerce. |
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The real objection to this in the business community is that it's not just the rate which differs from jurisdiction to jurisdiction - it's the categories of which goods are taxed. In order for this to work, there needs to be a large database of all of the zones a business delivers into, which contained machine-readble information about the tax rates in that area. The database would also need to know which inventory items fall into the various categories of tax. A nation and/or world-wide effort would be needed to gather this information, and new laws would have to be passed in order to enact it. Currently, tax jurisdiction is based on whether or not there is a "nexus" of business in the same zone as the consumer. |
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