Archive · 27 Dec 2025
Taxing Spending Over Earnings: A New Approach
Imagine if instead of paying taxes on the money you earn, you paid taxes on the money you spend.
This is called a consumption tax.
Some people think this could be a better way to tax because it might make people save more money when they earn a lot and spend less when they earn less.
This could help the economy grow and make people's lives better.
It's not a new idea, but it's getting more attention now because it might help with some big problems like people living longer and the economy not growing as fast as it used to.
The authors think that this kind of tax could be fair and help the economy grow at the same time.
A progressive consumption tax could incentivize saving and boost long-term economic growth.
Taxing consumption rather than income may reduce the penalty for higher earnings in peak years.
Income averaging could be a practical way to implement a consumption-based tax system.
A progressive consumption tax can redistribute income similarly to a progressive income tax but with fewer economic distortions.
The proposal aims to address long-term economic pressures like aging populations and stagnant productivity.
- Who
- Carlos da Costa and an unnamed co-author
- What
- A proposal to tax spending instead of income
- When
- December 27
- Where
- Glasgow
- Why
- To potentially increase living standards and economic growth
- Author
- Carlos da Costa and an unnamed co-author
- Publication
- The Conversation
- Date
- December 27
- Location
- Glasgow
- Tax Types Compared
- Income Tax, Consumption Tax
- Potential Benefit
- Permanent 10% increase in living standards
- Implementation Example
- Income averaging
