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Consumer Investment Tax

Tax the VAT and income taxes obliging government to buy shares of companies you engage with, and retire earlier.
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It has long been true, that the standard path to wealth is through investment, and compounding interest. However, how do you know what to invest to?

Well, the idea is that what you buy is already descriptive of the stuff that you need, so why not to automate its production? Welcome to consumer investment tax.

The investment tax works by adding an extra tax to VAT and income taxes, requiring the government to use taxes collected to buy the shares of companies that make the goods that you purchased or worked for, and distribute these shares back to you.

For example, if you buy a pack of milk, a fraction of the VAT would be used to buy you the shares of the company that made the milk. If you get employed in a company, and you have to pay income tax, then the income tax would be used to buy you the shares of the company for which you worked, or equivalent publicly traded company.

This way, any decision -- either to buy something, or to work in some company, would be a long-term investment decision. One may expect that people would choose to buy products of higher quality, and choose the workplaces that have better long-term prospects.

People who reach the retirement would simply be those who get the satisfaction of their needs fully automatic (e.g., if one needs milk, the amount of shares one owns gets the required amount of milk in dividends).

Result - nobody is left behind without passive income.

Inyuki, Oct 12 2018

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       The government could be tasked with opening a Robinhood account in everyone's name and regulating the card majors to round up every purchase that would accrue to the individual, much like some banks do now with card purchases -- rounded to the nearest $1 and added to a saving account.   

       The only additional benefit is that micropayments would go via stock market investment into national debt reduction instead of into individual savings accounts.   

       I don't have a problem with managing a VAT differently, but I have issues with a VAT generally and how governments regulate them more specifically. [bun]
reensure, Oct 12 2018
  

       Is this something that applies only in a B2C context - that is, at the bottom of commercial food chain?   

       Tax has a way of driving behavior, I guess is my point. If a consumer is to get an equity stake in the companies whose products and services he or she buys, they have an incentive to buy more of them (yay capitalism) but also to buy more of them from the same provider (boo disincentives to competition). On the other hand, if we have this operating in a B2B context, that is, through the VAT food chain, then suppliers may for example find that being tied into a single customer arrangement (as is the case for a lot of suppliers into the giant supermarket chains) becomes less attractive - why would would want to give the 600lb gorilla who squats on your chest any sort of equity stake?   

       And the retailers themselves may be less than enthusiastic, with price reductions in stores being at heart financial promotions, subject to brain meltingly complex and expensive regulation.
calum, Oct 17 2018
  
      
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