That seems like an implementation of the 'mass surveillance' solution to distribution. That probably appeals to many politicians, but to me that is intolerable.
It would also require different governments to cooperate; New York would have to be able and willing to redistribute part of my milage tax to a foreign country when that country says my car has been there. I don't know if that's feasible, but cynically I assume it would be difficult at best to put into practice.
There already is taxes like that, e.g on gasoline. Its very easy, just put a flat tax per liter. Then the more you use the more you pay. No need for extra surveillance, unless you want progressive taxaction of those resources.
It turns out if just one country tries do do that, it's pretty much impossible to correctly tax items that go in or out of the country border though. An error in either direction (too much or too little tax) will severely harm local businesses and the environment.
Side note: I am a US citizen, but I live in the Czech Republic at the moment, so I would be interested to see a system which would be flexible enough to allow any government to utilize.
This actually seems like an interesting enough problem that I may try to code up a website where people can anonymously enter how much tax they pay (in currency amounts) and how they would allocate it (in %). Then try to do some aggregates to see how countries would compare.
The UK is just launching something to address this: https://twitter.com/MattChorley/status/451773213497118720/ I expect it would be more difficult to do something similar for the US given the wedding-cake of federal, state and local taxes.
Sure, but unless you have tax inspectors following the entire population around and security cameras in their home, you're never going to be able to enforce that, as demonstrated by people already doing this sort of scheme. It's easier to just disincentivize it in the first place.
Good point. Although it's not a flawless solution. It's a good solution to the extent you can't practically shift your consumption to a different jurisdiction (or nation) that doesn't tax the sale of the item. Tricky part becomes capturing consumption tax at customs for items purchased elsewhere to dodge taxes. When you think about the large purchases you can make elsewhere and import with relative ease (like an expensive car) versus the things that can't practically be purchased elsewhere (like groceries), a consumption tax can end up looking regressive. I am a fan of a consumption tax that doesn't kick in until you are over a certain level of spending, so if you consume below a taxable minimum you pay nothing. It's hard to imagine how this would be administered in real life.
The pretty obvious solution, which I expect the government will eventually luck into, would be for the Federal government to collect a, say, 5% sales tax on all inter-state commerce. Remit 2% to state A, 2% to state B, keep 1% for itself, and everyone is happy. Easy to administer, easy to collect. Lucrative!
Taxes would be based on fair market value at the time of the transaction. There are policies around this already, otherwise the rich could avoid taxes by bartering with cars/watches/paintings.
It would be great for the taxpayer if you could do that but the government would lose out on so much revenue. So I think any such proposal is dead on arrival.
3. Something similar is actually already the case in areas like Hong Kong and other commonwealth states. It's called a stamp tax (http://en.wikipedia.org/wiki/Stamp_tax#Hong_Kong) Might be an issue in the US for obvious reasons :)
I think blockchain will help us with this. Immutable entry of places the product has been stored that is public. Then taxes can be divided out based on time etc.
However I'd be concerned that the law would work differently with a subset than the whole population. For instance take a law banning cellphones while driving. If you try to apply this to half the population, then the police aren't going to try to apply it because at least half the time they would be pulling over people who are allowed to use cellphones. But if you pass the law for all of the people, then the police could enforce it. So you try to solve this by saying that it will be selectively enforced according to location. But now you've gotten rid of the random selection that is the heart of evaluating the statistics.
For another example, look at the tax cut example they were discussing. The challenge here is that the touted economic benefit of tax cutting is that people with lower taxes spend their money, increasing circulation, and general prosperity. (And eventually improving tax revenue.) However there is no way to economically separate out the people you're giving the cut to from those you aren't. Therefore any economic change cannot be attributed to the tax cut, and you're unlikely to get a clear economic difference. (Other than that the less taxed have more disposable income.)
The tax you're describing sounds like it would be illegal under international law and tied up in courts for years if not decades. I don't think it's necessarily a bad idea in principle, but I don't understand why you would have to do that first before taking much more achievable action. There are a lot of people working on this problem, we can focus on quite a bit at the same time.
I assume you also mean do something like tax consumption? I like the idea but haven't read too much literature on how that would actually work out -- if anyone has good links please share!
It would also require different governments to cooperate; New York would have to be able and willing to redistribute part of my milage tax to a foreign country when that country says my car has been there. I don't know if that's feasible, but cynically I assume it would be difficult at best to put into practice.
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