Prices are set on the margins, the reason people are paid what they are is because even a relatively small change would cause someone to do something differently. Same theory as why we can be confident raising the price of something a few cents is likely to cause someone to change their decisions - if it wasn't, the seller would raise the price by a few cents.

It isn't obvious what a 10% across-the-market tax will do, but by the nature of prices they are always going to be set near tipping points so it probably is going to cause people to drop out of the workforce or reduce the amount of time they spend working. Maybe tip people into less productive jobs that pay cash. I dunno. How many people and how many hours is an open question but all your imagination is really telling you is that you don't deal with marginal participants in the workforce.

I was initially skeptical of removal of income tax, but it's replacement with consumption tax makes sense.

Currently, income is "discouraged" through financial instruments such as Securities-Backed Line of Credit (SBLOC), which are very much only feasible in the realm of the very rich. Some part of this loophole can be offset by corporate tax, but corporate tax is based on profit, not income, incentivising all sorts of unproductive spending behaviour e.g. stock buybacks.

To me, the switch to consumption tax does a couple of things:

1. Instill discipline. Higher spending does not equate to higher productivity. By taxing spending, discipline will be instilled in both the consumer and corporation. With consumption tax, there will be no brackets, rather the amount of tax will be based on what the government policy is. Smoking bad? Higher tax. Soy milk more environmentally friendly? Lower tax.

2. Simplify tax situation with "capital gains". You pay tax upfront, now we don't need to evaluate what happens to the value of the stock, that will be the problem for the next buyer. No loophole for capital gains tax with inheritance.

I’m not classifying it as the best solution. I’m quoting an NPR article describing the consensus view of economics experts.

But as I understand it, the reason is that consumption taxes have the least distortion in terms of deviating from the efficient behavior in the no-tax scenario: https://www.weforum.org/stories/2019/09/using-tax-to-tackle-...

It's an NPR story with economics experts describing positions that are consensus in their field but politically unpopular.

> Tuesday's show presented the common-sense, no-nonsense Planet Money economic plan — backed by economists of all stripes, but probably toxic to any candidate that might endorse it... There you have it, six major proposals that have broad agreement, at least among economists.

The goal is economic growth, which matters more than anything else. Fun fact: in 1900, Argentina was one of the richest countries in the world, at about 60% of US GDP per capita: https://ourworldindata.org/data-insights/argentina-was-one-o.... Today, Argentina has under 20% of the GDP per capita of the US. The difference is that the U.S. has grown at about 1.7% annually for the past century and change, while Argentina only grew at about 1% annually.

Maybe you're willing to give up 70 basis points in pursuit of a "fairer" society, but that means your grandkids will live in a much poorer society than they'd otherwise live in. This is the trajectory Europe is in currently. Having missed the boat on the Internet, space travel, and now AI, I suspect my grandkids will see a world where people are immigrating from Europe to China the way we see people immigrating from Argentina to the U.S.