Ask HN: Daddy, what's "tax"?

https://news.ycombinator.com/item?id=2182341

by Pistos2 • 15 years ago

7 12 15 years ago

news.ycombinator.com

My daughter just asked me this. I could only laugh.

Pistos2• 15 years ago

"It's like trying to eat, but before you can bite, someone takes some of the food off your spoon."

pekinb• 15 years ago

"It's like trying to eat, but before you can bite, you have to pay for your share of the spoon."

bdclimber142• 15 years ago

Take half her toys away, and say "I just taxed you."

codeslush• 15 years ago

This is an absolutely beautiful way to define it! Made me laugh. Thank, you.

Now, give her a toy she doesn't like and say this is what you just paid for.

But before you let her get too mad, tell her to go ride her bike and inform her that the toys she gave up helped pay for the streets/sidewalk on which she rides her bike.

Not perfect, but could be worse.

beagle32• 15 years ago

And that it also pays for your friend's cigars. Because the banksters have to be represented in this analogy too.

consultutah• 15 years ago

Tax is when those horrible democrats take all of daddy's money so he doesn't have any left to buy you toys.

You can substitute republicans in there too, as long as you are talking about the last two decades or so..

rick_20472• 15 years ago

I know most of the people here did not take this seriously, but in an ideal world this is how taxes would work (I am no economist so take this with a grain of salt, this is what I think should happen).

"Government needs money to run. They have to develop infrastructures and pay salary of public servants. Also they have to provide welfare to under privileged and subsidies to student communities and such. They cannot just print infinite number of notes so they have to take money from the current cash flow. The cash flow here means things like purchases, salaries, revenue, real estate etc. Now, to do that they have to decide how much to take from whom. They cannot take a fix amount as not every mode of cashflow would be viable with that fix amount. So they decide how much to pull from where. Thus on income we have income tax. But that too is not fixed. You pay depending upon the size of your income and nothing else. Thus ideally, the rich pay more and poor pay less. On the other hand, you have things like sales tax, where the government takes a fixed percentage of all the sales made by a company.

In short the government takes some amount of your money each time you make a transaction... well most of the times. But rest assured, your money comes back to you. The government gives it back in terms of infrastructure or services or carnivals or social security or things like that."

I know this is not perfect, nor is it what happens in the real world. But this is what should happen I think.

Someone• 15 years ago

They cannot just print infinite number of notes

Actually, they could. Printing say 1 note for every 9 notes in existence would lead to an inflation of around 11% and is equivalent to a uniform property tax of 10%.

The reasons we don't do things that way I can think of are:

- it would make inflation huge (government spending typically is over 30% of GDP; that would give over 50% inflation)

- it was not possible under the gold standard.

- people would feel it as unjust that one's cash and bank accounts are 'taxed', but e.g. houses one owns are not.

- because of the former, it would tax the poor way more than the rich.

It would be a really good way to stimulate consumer spending, though.

mooism2• 15 years ago

Also, people would eventually stop using the government's currency, the bank notes it printed would then be worthless, and the government would have to start explicitly taxing again. Only now it would have an economy denominated in a foreign currency.

Ask HN: Daddy, what's "tax"?

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