And this is why the 1983 tax cut in the US increased revenue as at the reduced rates more wealthy people paid rather than avoided taxes.
Lauchs@lemmy.world 3 days ago
They also tax the rich through progressive income taxes, capital gains taxes, corporate taxes etc.
If you’re asking why not just tax the rich in place of a VAT, well, it’s sort of why not tax the rich to pay for absolutely everything we could want. The costs and difficulties in taxing the rich generally scale to the point where the marginal revenue raised by the tax becomes negative.
MothmanDelorian@lemmy.world 2 days ago
Lauchs@lemmy.world 2 days ago
Oh interesting, I wasn’t aware there were actually examples of the Laffer curve working in reality! I alwats thought it was just a theoretical that conservatives had latched onto…
MothmanDelorian@lemmy.world 2 days ago
It is the only incident of Laffer being proven correct as far as I know. It is the 2nd to last time spending was cut along side taxes.
IDKWhatUsernametoPutHereLolol@lemmy.dbzer0.com 3 days ago
So basically, you can only tax so much before the rich get mad and leave the EU? 🤔
Allero@lemmy.today 3 days ago
More like the rich will get even more proficient in tax avoidance
Lauchs@lemmy.world 3 days ago
No, EU member states handle taxes individually.
But, that ease of travel is one inducement. (Consider, as billionaire Spaniard learns the government plans to tax an additional 100 million euros. With no border, is moving a few km next door to Portugal worth a 100 million?
More meaningful though is business taxes/regulations, which are a large part of why Europe has lost so many Unicorns to the NYSE and why within America, Texas is kind of killing it in terms of business relocations.
I personally think it’s a race to the bottom but those are the constraints that exist.