Comment by alexey-salmin

Comment by alexey-salmin 2 days ago

> People pay their babysitters or gardeners under the table, or transact with friends and family without reporting income, and this is a huge amount of lost tax revenue.

This money was already taxed when the individual who pays the babysitter received it. It's questionable whether the society as a whole benefits from taxing babysitters.

> Heck, in the era of ZIRP, many economists were seriously talking about negative interest rates. You can't do that if a person has the option of taking out cash and hiding it under the mattress.

I'm not sure you'll gain much support for bespoke policies like that. Just reading this passage made me feel an urge to hide some cash under the mattress.

potato3732842 2 days ago

>This money was already taxed when the individual who pays the babysitter received it. It's questionable whether the society as a whole benefits from taxing babysitters.

Replace babysitter with any government regulated and licensed profession and the motives become clearer. The government gets power by forcing things above the table because once above the table you can be forced to transact with who they want and how they want and those parties then become dependent upon government to a degree.

There's no such thing as cash under the table land surveying, for example.

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danaris 2 days ago

> This money was already taxed when the individual who pays the babysitter received it.

And the money the retail clerk gets paid was already taxed when the customers spent it at the store. No, wait, it was already taxed when they got paid it! No, wait, it was already taxed when the customers of their employers spent it! No, wait——

...This whole idea of "money getting taxed multiple times" being a bad thing is absurd. Of course any given dollar going through the economy is going to get taxed many times. It's not about the dollars; it's about the transactions. And, ultimately, it's about funding the government so it can actually provide services, from sanitation all the way up to the military.

(Note that this is not an attempt to say that "the more taxation, the better"; that's obviously absurd, too. There are different levels of taxation that make sense for different people, different countries, different transactions, and different economic circumstances. There is no one simple magic rule you can follow that will always make things better when it comes to taxation, any more than there is with anything else economic or political.)

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ifyoubuildit 2 days ago

You get less of what you disincentivize. Putting artificial friction on every single transaction is not free, and it's fucking obnoxious.
Meanwhile, the government you fund takes that money and uses it to surveil you, and commits crimes across the world in your name. And this giant machine that's supposed to stop the bad guys tells you there's nothing to see here when some big scandal comes up right in front of your face.
Yes, I think money being taxed multiple times is too much.

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- danaris 2 days ago
  
  So you think each dollar should be tagged when it's minted, so that the first time it gets taxed—whether that's in sales tax, income tax, capital gains, or what have you—it gets marked "this one's done!" and it can never be taxed again?
  
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  ifyoubuildit 2 days ago
  
  Probably not. What needs to happen is the government should be small enough that you can realistically fund it entirely via some minimally invasive tax scheme.
  Government is essential, massive government is not. Yet the system we have now is probably the smallest it will ever be (before it collapses anyway).
  
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alexey-salmin 2 days ago

> And the money the retail clerk gets paid was already taxed when the customers spent it at the store.
Your imaginary analogy chain breaks here. The store is taxed on what's left after the expenses, individuals are taxed on the total income.
If I, as an individual, could deduct my babysitter expenses from my income taxes, I would have no questions as to why babysitter has to pay them. This doesn't happen however. In some countries you can deduct 50% at best.
Therefore I don't see the point of taxing first the parent and then the babysitter again. You can as well tax the parent 2x, it would be the same from the economical standpoint.
> There are different levels of taxation that make sense for different people, different countries, different transactions, and different economic circumstances
You didn't make any effort to explain why taxing babysitters is the "level that makes sense" as you put it. You just write some generic words how taxes are good in general and help government to provide services. It's irrelevant to our conversation.

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