2 ms·
You are making a rather big assumption. Orthodox economic theory has a lot of (well argued) focus on economic "efficiency." But, even positive sum games can ha
by netcan 11y ago
You are making a rather big assumption. Orthodox economic theory has a lot of (well argued) focus on economic "efficiency." But, even positive sum games can have negative impact on a specific party.
IE, I agree with the orthodox position (EG Milton Friedman) that taxing person A to provide services to person A is generally a bad deal for person A.
If there was a policy whereby tax is raised and groceries are provided by central buying organisation and distributed back proportionally to their contribution, almost everyone would loose. The production of groceries would be worse. etc. But, that doesn't mean a progressive redistribution would harm everyone.
In my groceries example the reality is that the vast majority would be far worse off. It's a very bad policy. My point is that the argument for progressive taxation is in my opinion very hard to dismiss from an economics perspective. A dollar is not of equal consumption value in different hands to the same extent that it is not of equal productive value in all hands. Consumption does not have the same market forces funnelling it to its highest value use, a consumption equivalent of Coase theorom or somesuch.
The advantage of redistribution of wealth at point of consumption is (again, IMO) real and it grows bigger as wealth becomes more unevenly distributed.
- jnordwick 11y agoI'm not saying you shouldn't redistribute. I don't have a problem with that actually. I'm arguing that if you are going to (and let me reiterate, I think we should), there are much better ways to do it than a tax on capital. Capital gains taxes make up about 4% of total revenue. For that 4%, we pay almost half of that on enforcement. So, for 2% of our revenue, we do some pretty nasty damage. There definitely are better ways.