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Post By
mjyoung

In Reply To
Dark Marvel

Member Since: Sat May 17, 2008
Posts: 5,955
Subj: Re: What's wrong with spreading the wealth?
Posted: Sat Oct 18, 2008 at 01:04:51 am EDT (Viewed 842 times)
Reply Subj: Re: What's wrong with spreading the wealth?
Posted: Sat Oct 18, 2008 at 12:07:25 am EDT (Viewed 861 times)


> ***I do not think it is punishment at all. You make money. You pay taxes. That money goes to many things that help all people, Fire Dept's, the wars etc etc...If you are rich then you pay more taxes because you are rich and can afford it. I do not understand what is so evil about that. The wealthiest 1% makes more money than the bottom 50%...How can this country have soo many billionaires and have extremely high child poverty as well? I do not think that is what this country is all about.

Taxes are/can be a punishment simply because it's a loss for the individual.

Now, I'm in favor of a progressive income tax (the more you earn, the higher percentage that you pay in taxes), but there are problems with this.

For one, it encourages people to not make more money. An example would be someone that makes $100K a year, but pays $30K (30%) in taxes. He could work an additional 500 hours a year and make an additional $20K, but because of a progressive income tax, he now has to pay $42K in taxes. So for 500 hours more a year, he will make $8K more a year. It might not be worth it for him to work that extra 500 hours, because he would have a better time taking a vacation.

Or to use another example. Pretend that you are a salesman, and you have a sales target of 500 widgets. If you sell that many, you get a 20% commission. If you sell 600, you get a 25% commission. If you sell 700, you get a 30% commission. Now, a company does this because it wants to create an incentive for you to sell more. And this is an example of a progressive commission rate.

But since a tax is a loss (takes money away from you), it would have the opposite of the above example with widgets. You still get 20% if you sell 500, but if you sell 600 you get 15%. If you sell 700, you get 10%. So obviously you are going to stop selling at 500 widgets.

So, a progressive tax does have it's problems, as all tax systems do.

As for me, I think I like the idea of just going to a sales tax. That way, you are only taxed on things you buy. But I would make taxes higher on luxury objects (yachts), sin objects (cigarettes), and items we want to persuade people not to buy (soda, junk food). And I would also make certain objects have either no or little tax that are needed by all, or that we want to promote the sale of (like milk, bread, fruit). Just an idea, and I'm sure it has it's flaws.


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