> And getting rid of capital gains tax would increase economic efficiency because it currently prevents people from selling shares in order to buy better shares unless the advantage of the new shares can overcome the taxes due from selling the existing ones.
Getting rid of capital gains tax to encourage reinvestment is kind of silly. Heck, you could tax capital gains as regular income, and still eliminate any drag on reinvestment by allowing deductions for investment so long as the investments for which such deductions were taken were treated as having a zero basis value.
> It's conceivable that a consumption tax would cause the super-rich to pay more taxes, because if you want the yacht you have to pay the tax
Not really. You just structure the transactions to avoid what is taxable, e.g., you buy the yacht at a low nominal price and simultaneously (and completely coincidentally) by some financial investment not subject to consumption tax from the same party at an inflated price.
Anyone who can avoid paying taxes on their income in an income tax system can avoid paying taxes on it in a consumption tax system. (If you have an "unconditionally tax every transfer of money between two parties" system, it gets harder, but that has all kinds of downsides.)
> but there are currently a lot of tricks you can play to convert stock into stuff without paying tax, like selling only the shares that have decreased in value.
Sure, if you only ever sell shares that have lost value, you can avoid paying the (low) capital gains tax, at the expense of always losing money.
That's not a way to maximize your net, after taxes, utility, but if you want to lose money just to avoid paying a small portion of the gain in taxes...
> The best way to think of a basic income is as a fixed tax refund.
I think you mean "fixed refundable credit" rather than a "fixed refund".