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0 pointsRhysU5mo ago0 comments

Suppose you buy bread, meat, and cheese and pay sales tax for each of them. You make a sandwich. You eat the sandwich.

Do you now owe the government the difference in sales tax on the market price of a pre-assembled sandwich versus on the market price of the individual bread, meat, and cheese?

Is it "fair" to owe the government the incremental sandwich sales tax? Should someone who can buy separate bread, meat, and cheese ingredients get such marginal sales tax benefits relative to someone who only can buy pre-made sandwiches? Or does owning the bread, meat, and cheese mean that whatever marginal value you extract from the ingredients' use is fully yours?

Supporting imputed rent seems consistent with supporting my hypothetical sandwich marginal sales tax. It's ridiculous.

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brainwad5mo ago

Switzerland doesn't have property taxes, so it's better to think of the imputed rental tax as a more progressive implementation of a property tax. Low earners pay less tax on a home of the same value than high earners. And the tax is less distorted by asset price bubbles, since you're taxing the imputed rent instead of the market value.

Now it's abolished, owner-occupied homes will mostly go untaxed, while investor owned ones will be taxed just as before. This is distortionary, but it seems politically infeasible to also abolish income tax on investment income.

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tomp5mo ago

It’s not a really good analogy because it’s mostly labour (whereas housing is mostly an investment) but yeah, this argument of “fairness” is common, e.g. by feminists (“housework should be paid or at least accounted for pension”) and governments (e.g. in Slovenia, it’s illegal to help neighbors for free).

I think it’s mostly ridiculous, though on other grounds than “fairness”.

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