Have each citizen pay the service provider directly for the portion of the service they use, at the time of consumption. Allow the service provider to charge an administrative tax on top of the service tax to cover expenses. This policy will have problems, "toll sidewalks" being one of the easier ones. But it solves a lot of big problems. How well does it satisfy your goals? Fair: This is very hard to pin down. People who pay more will argue that any system is unfair, and people who pay less will argue that it is fair. Your goal, to "avoid situations where some pay taxes while other's don't" is tricky. Smokers pay tobacco tax, non-smokers don't. Many "loopholes" are created for good reasons: charities don't pay property tax, people with fuel-efficient cars don't pay a gas guzzler tax. With my proposal, people who use services pay the taxes that provide the services, proportional to how much they use. No one pays for services they don't use. That is about as close to a dictionary definition of "fair" as I can imagine. Progressive: It's a consumption tax, so citizens who consume more services will pay more, and it's reasonable to suppose that citizens who earn more will consume more. Simple: No accountant or lawyer needed. No tax infrastructure. No tax code. Anyone can choose to provide a service, and they are automatically granted a permanent, free, tax-collector license. No paperwork.
The definition of "use" becomes problematic too, however. Do I "use", say, the schools in my home town, even though I don't have kids? The schools locally inflate my property value, and schools generally help keep the economy moving. One could easily make similar arguments about other infrastructure, as well.
If you don't have kids, you don't use the schools. That's common sense. If there is any disagreement, the school administrator can send you a bill, you can refuse to pay it, and the school administrator can refrain from making any special effort to inflate your property value. Inflated property values mean you are punished when you buy and rewarded when you sell. If someone builds a good school while you live there, you're lucky, good for you. If they build a landfill, too bad. Unless you wanted a landfill. Can you give a stronger example for other infrastructure?
ANY infrastructure. You're encouraging free rider status by only paying for direct use. Roads, airports, and sea ports, for example, all contribute massively to our economy, which each of us benefits from, independent of whether we've ever leased a container ship.
Suppose we pay for roads with a general per capita tax, simply divide total road cost by population. Now there is no incentive for any individual to economize on road use. Everyone pays, but everyone behaves like a free rider. Suppose instead we pay for roads with a tax on gasoline. Now people who use roads more pay more. This seems more fair. People who don't use roads much don't pay much. But it's not perfect; people who buy gasoline for lawn mowers still pay for roads. People who drive electric cars will be free riders. Self-supporting toll roads provide incentive to build and maintain roads where people want them, with no free riders (possibly with exceptions: free use for toll road employees, discounts for mass transit). If I don't use the roads myself, but benefit because my trash removal company uses the roads, the trash removal company will include a portion of their road tax in my trash bill. Your "contribute to the economy" language is vague. If someone benefits from a service, they ought to be willing to pay for it. It might be difficult or impossible to require payment, such as a bakery that can't bill neighbors for the pleasant aroma. Maybe that's not a good example. Can you think of a better, specific, example?
But isn't our current system--a combination gas taxes, vehicle registration, and general tax funds--a reasonable way to hedge against free riders? It sets a kind of low and high bar for usage. There are a number of examples outside of transportation that use this type of hybrid model (public universities, for one). I think they work better in some areas than others. I would agree if you said that many of these public subsidies (for transportation, e.g.) can work to the benefit of corporations at the expense of payers. It would be an interesting world if the price of a t-shirt at a big box store included the full cost of shipping as well as workers' heath care and housing. I don't know if that world would be better or worse for more people on average.
A free rider is someone who can increase consumption of a service without incurring additional cost. My proposal aims to link consumption and cost as closely as possible, minimizing free riders. I think any alternative would increase free riders. Consider vehicle registration. It's typically not a flat rate per vehicle. Antique vehicles and motorcycles get a discount. Heavier vehicles and commercial vehicles pay more. These crude adjustments make the registration fee more closely match the usage cost the drivers will impose on the roads. A gas tax is a closer but still approximate measure of road usage. A general tax is completely disconnected. Why should a New York City resident without a car subsidize Alaskan highways? No system will be perfect. A kid on the back seat is literally a free rider (unless a toll operator charges for passengers). But the weight of an extra kid does not add much wear and tear to a highway. I think that the incentives work out best when those who have a stake in the operation make the decisions, rather than distant planners making inflexible one-size-fits-all rules for others. I believe the price of a t-shirt does include the full cost of shipping (how else would the container ship lease get paid?). If the t-shirt factory worker pays for housing or health care with their salary, then the price of the t-shirt also includes these costs. Of course public subsidies can work to the benefit of corporations at the expense of taxpayers; do I need to say it?
"fair": I meant it as no one is cheating the system (rather than the system itself is fair). IE if there's a tax for smokers only, it's ok that non smokers don't have to pay it. On the other hand, if some smokers don't pay that tax because they found a way around it, then that's unfair to the other smokers who are paying. For your proposal to be fair, they'd need to be a way to bill for all goods and services, which may be technically hard to do (how do you implement sidewalks tolls in a way that it can't be bypassed by walking on people's grass?) . "progressive". The more money people have the less they spend on goods and services and the more they invest. Basically if you make 1M and spend 100K on goods and services, you'd only be taxes on 10% of your income vs someone making 50K who's going to be taxes on 100% of income. This problem is amplified with compound interest on investments (rich getting richer faster). My proposal tries to resolve this with an investment tax, but it might be better to keep the capital gain tax instead. . "Simple": For public goods (sidewalks, military, etc) i don't think it'll be easy to track who owes what.