Marcos, I haven't figured it out fully and maybe economists could point out why it's bad, but I've thought for a while that the point of governments [and therefore tax] is primarily to defend and run the territory inside a border. Therefore, the stuff crossing the border should be where the income comes from to defend the border, police the interior, enforce contracts and negotiate on the commons outside the border [such as air quality, ocean protection, climate management, radio frequency management and so on].
Tax on big things [such as supertankers] is easier to manage than tax on small things [platinum watches bought by people visiting Hong Kong]. So, tax oil imports, LNG imports, coal imports, steel imports, sheep imports, car imports and so on. As you say, cut taxes on internal economic activity accordingly.
But care needs to be taken with taxing imports or stupid activities can be caused by excessive import taxes. Japan grows rice at very high cost when they could buy it from Australia for very low cost. That's a self-defence mechanism I think, so their food supply can't be cut off.
Better still is to cut government spending so the taxes needed are very low.
Mqurice |
