Almost everything I do with my podcast and writing is aimed at encouraging borderless thinking and hoping to make the immigration process less racist and classist. While I see many benefits in more continents following the example of Schengen states, open borders, and getting rid of income tax would not solve the world's problems.
Let's take a look at some social democracies. For example, in Belgium, where you pay 21% tax on most goods, people still have to pay 25-50% income tax. Currently, the VAT (Value Added Tax) in Norway is 25.00%, and general income is taxed at a flat rate of 22%. If the sales tax became even higher due to the elimination of income tax, these countries would become even more unaffordable for many people coming from developing nations than they already are.
Examples of countries that have sales tax and very low income tax are the United Arab Emirates (UAE), Saudi Arabia, Bahrain, Qatar, Oman, and Monaco. None of these countries are particularly known for benefiting people forced to cross borders but rather benefit the rich.
A much fairer solution would be to create a significantly higher tax on luxury goods and services and prevent corporations from establishing their headquarters in tax havens.
Here are some other dangers of relying on sales tax without income tax:
Since sales taxes apply to most goods and services, regardless of income level, they take a higher percentage of income from those with lower incomes
Higher sales taxes can discourage consumer spending as individuals have less disposable income available. Yes, we need to consume less, but the wealthy could afford to keep spending whereas the poor would suffer.
Relying solely on a sales tax can increase the incentives for tax evasion and the growth of black market activities.
By relying solely on sales tax, the progressive nature of income tax is lost, potentially exacerbating income inequality.
In other words, we would be creating a borderless word for the wealthy. I really enjoyed your piece, but upon further reflection, the idea seems more dystopian than utopian to me. It would be really interesting to get @Lauren Razavi's from @Global Natives perspective on this because she is trying to increase the mobility rights of people everywhere with Plumia.
I'd never come across the concept of Fair Tax, but it makes a lot of intuitive sense. Do you have any recommendations on further reading (especially good critical discussion of the downsides)? I also really like the open borders + updated tax policy angle. I think if you give it treatment in Oblivion it could serve as a really interesting piece of design fiction (another concept I just came across and really like: https://en.wikipedia.org/wiki/Design_fiction).
Elle, you genuinely surprised me. I did not expect your article to veer away from the idea of open borders to an argument in favor of the Fair Tax. Normally, the side that advocates for open borders is very opposed to the idea of a consumption based tax. So, I was pleasantly surprised to see you making an argument for both in the same piece. It shows that you have thought about the issue and come to your own conclusions rather than repeating someone else's dogma.
Well thought out and intriguing. Thank you. You made my day! I've thought this for a long time and believe open boarders would be the best. Probably would be easiest if welfare and government handouts where equal from country to country.
The key problem with a “consumption tax” is that it’s what tax experts call a “regressive” tax -- one that falls more heavily, as a percentage of income, on lower-income income persons. This is obvious when one considers that people with lower income tend to spend most or all of it on non-discretionary items like food, clothing, and shelter, so unless you exclude those categories from the tax, the poorer members of a society will be contributing a higher percentage of their income to the government than the wealthy. The value-added tax (VAT) in most countries in Europe is a current example of a consumption tax, though income disparities in most of Europe are less dramatic than in the Americas. So there’s a cart-before-the-horse issue with financing a borderless society with a consumption tax.
What an intriguing idea. I wonder, would we also tax services at this rate? For instance, a haircut, or getting nails done, or flying, or many of the myriad things we do each week that don’t require “buying” something concrete.
As a Floridian I know that we will jack up our houses and drive jet skis before we fall into the sea! Lol
And yes, open the borders and give everyone automatic work permits! Sooo many Canadians will flock to the US because it’s too cold and that will be great for America.
Also your tax model is basically the Florida model. Florida has no income tax, but the wealthy pay a lot in taxes in Florida compared to the poor, because so much is tourism and property tax, and Florida is doing very well with this system.
One thing that has to be addressed is the tendency for human reason to be overridden by human passions. These ideas you present are good logically but will face backlash as they do in reality because of prejudice, fear, and stubbornness. How do we speak to those in our fictional societies? I don't mean to press for an answer now. Just something to consider going forward.
Haha - I love you wrote this, because I've had so many conversations recently around it, and was thinking of writing something up. And now I can just point folk to this newsletter instead! Back of the net. #lazy #badworkethic
But yes, there is so much to discuss and unpack here! One conversation I had was with some travel writers about how travel writing in the rest of the 21st Century will be dominated by themes of migration, and everything in between (ie. seasonality, recreational and otherwise). I've hung out with a lot of travel bloggers and digital nomads of all kinds, and I think I've seen a little of what some of it could look like - for example, a reappraisal of "owning" things, which you shift to either renting them or being part of a chain or collective where that thing gets passed around for the benefit of all. Seems like our idea of ownership, like borders, can become a lot more fluid than it is now, and the world will not break apart...
Within digital nomadism there's a very influential essay by the writer Venkat Rao, which you may find interesting: https://www.ribbonfarm.com/2011/07/31/on-being-an-illegible-person/ It argues that for some people, stability *is* movement - and it's only when they stop in one place for too long that their lifestyle starts coming apart.
Almost everything I do with my podcast and writing is aimed at encouraging borderless thinking and hoping to make the immigration process less racist and classist. While I see many benefits in more continents following the example of Schengen states, open borders, and getting rid of income tax would not solve the world's problems.
Let's take a look at some social democracies. For example, in Belgium, where you pay 21% tax on most goods, people still have to pay 25-50% income tax. Currently, the VAT (Value Added Tax) in Norway is 25.00%, and general income is taxed at a flat rate of 22%. If the sales tax became even higher due to the elimination of income tax, these countries would become even more unaffordable for many people coming from developing nations than they already are.
Examples of countries that have sales tax and very low income tax are the United Arab Emirates (UAE), Saudi Arabia, Bahrain, Qatar, Oman, and Monaco. None of these countries are particularly known for benefiting people forced to cross borders but rather benefit the rich.
A much fairer solution would be to create a significantly higher tax on luxury goods and services and prevent corporations from establishing their headquarters in tax havens.
Here are some other dangers of relying on sales tax without income tax:
Since sales taxes apply to most goods and services, regardless of income level, they take a higher percentage of income from those with lower incomes
Higher sales taxes can discourage consumer spending as individuals have less disposable income available. Yes, we need to consume less, but the wealthy could afford to keep spending whereas the poor would suffer.
Relying solely on a sales tax can increase the incentives for tax evasion and the growth of black market activities.
By relying solely on sales tax, the progressive nature of income tax is lost, potentially exacerbating income inequality.
In other words, we would be creating a borderless word for the wealthy. I really enjoyed your piece, but upon further reflection, the idea seems more dystopian than utopian to me. It would be really interesting to get @Lauren Razavi's from @Global Natives perspective on this because she is trying to increase the mobility rights of people everywhere with Plumia.
I'd never come across the concept of Fair Tax, but it makes a lot of intuitive sense. Do you have any recommendations on further reading (especially good critical discussion of the downsides)? I also really like the open borders + updated tax policy angle. I think if you give it treatment in Oblivion it could serve as a really interesting piece of design fiction (another concept I just came across and really like: https://en.wikipedia.org/wiki/Design_fiction).
https://growingupboomer.net/2021/11/29/boomers-and-the-end-of-civilization-as-we-know-it/
Ok, as long as they’re realistically factoring in the huge revenue and administrative cost this entails.
Thanks, Elle; I enjoy your work! -K
Elle, you genuinely surprised me. I did not expect your article to veer away from the idea of open borders to an argument in favor of the Fair Tax. Normally, the side that advocates for open borders is very opposed to the idea of a consumption based tax. So, I was pleasantly surprised to see you making an argument for both in the same piece. It shows that you have thought about the issue and come to your own conclusions rather than repeating someone else's dogma.
Well thought out and intriguing. Thank you. You made my day! I've thought this for a long time and believe open boarders would be the best. Probably would be easiest if welfare and government handouts where equal from country to country.
The key problem with a “consumption tax” is that it’s what tax experts call a “regressive” tax -- one that falls more heavily, as a percentage of income, on lower-income income persons. This is obvious when one considers that people with lower income tend to spend most or all of it on non-discretionary items like food, clothing, and shelter, so unless you exclude those categories from the tax, the poorer members of a society will be contributing a higher percentage of their income to the government than the wealthy. The value-added tax (VAT) in most countries in Europe is a current example of a consumption tax, though income disparities in most of Europe are less dramatic than in the Americas. So there’s a cart-before-the-horse issue with financing a borderless society with a consumption tax.
What an intriguing idea. I wonder, would we also tax services at this rate? For instance, a haircut, or getting nails done, or flying, or many of the myriad things we do each week that don’t require “buying” something concrete.
As a Floridian I know that we will jack up our houses and drive jet skis before we fall into the sea! Lol
And yes, open the borders and give everyone automatic work permits! Sooo many Canadians will flock to the US because it’s too cold and that will be great for America.
Also your tax model is basically the Florida model. Florida has no income tax, but the wealthy pay a lot in taxes in Florida compared to the poor, because so much is tourism and property tax, and Florida is doing very well with this system.
One thing that has to be addressed is the tendency for human reason to be overridden by human passions. These ideas you present are good logically but will face backlash as they do in reality because of prejudice, fear, and stubbornness. How do we speak to those in our fictional societies? I don't mean to press for an answer now. Just something to consider going forward.
Haha - I love you wrote this, because I've had so many conversations recently around it, and was thinking of writing something up. And now I can just point folk to this newsletter instead! Back of the net. #lazy #badworkethic
But yes, there is so much to discuss and unpack here! One conversation I had was with some travel writers about how travel writing in the rest of the 21st Century will be dominated by themes of migration, and everything in between (ie. seasonality, recreational and otherwise). I've hung out with a lot of travel bloggers and digital nomads of all kinds, and I think I've seen a little of what some of it could look like - for example, a reappraisal of "owning" things, which you shift to either renting them or being part of a chain or collective where that thing gets passed around for the benefit of all. Seems like our idea of ownership, like borders, can become a lot more fluid than it is now, and the world will not break apart...
Within digital nomadism there's a very influential essay by the writer Venkat Rao, which you may find interesting: https://www.ribbonfarm.com/2011/07/31/on-being-an-illegible-person/ It argues that for some people, stability *is* movement - and it's only when they stop in one place for too long that their lifestyle starts coming apart.