13 ms·

I never understand why the term "progressive" gets painted in a positive light? If I eat a steak, the restaurant doesn't come to me and say "Hey, you make 10%

by aantix 11y ago

I never understand why the term "progressive" gets painted in a positive light? If I eat a steak, the restaurant doesn't come to me and say "Hey, you make 10% more than the guy two tables down, so you'll pay 10% more for your steak". Why did this sliding rule ever get enacted for taxation? If you use something, you pay for it at the established price.

matthewmacleod 11y ago
Oh, come on. I know you get it. Taxation is a generally accepted necessary evil way to fund projects and services for the common good. A progressive tax policy recognises that a person with a high income can bear a greater burden; taxing a minimum wage earner 30% of their income would have a much higher proportional effect on quality of life that someone earning, say, 200k. We seem to accept progressive taxation as fair, in the sense that it causes no more inconvenience to low earners than high earners. The comparison with a private commercial service is flawed, in the sense that engagement with it is an entirely personal choice.
- msandford 11y ago
  > The comparison with a private commercial service is flawed, in the sense that engagement with it is an entirely personal choice. That's exactly what a lot of people are up in arms about, they get taxed hugely but get no real say in how the money is spent. Sure they get a vote, but if your candidate loses it's not as though you're exempt from paying taxes. In some way these people are right; if they choose to engage in commerce they aren't being forced to do anything and as such "whatever the market will bear" is a good metric. Taxes aren't about "whatever the market will bear" though because you don't have a choice to not consume and therefore not pay.
- oldmanjay 11y ago
  A "progressive" tax policy is so named because it hijacks the positive associations of the word for political gain. Patiently explaining why we should all love the definition doesn't actually address the point being made.
  - matthewmacleod 11y ago
    Wait, what? I'm pretty sure it's called 'progressive' because the rate of taxation 'progresses' as income increases – not because of any association with progressivism per se.
- theseatoms 11y ago
  An argument I've heard for income tax progressivity is that the very wealthy have far more to lose if the state crumbled and society devolved into a state of nature. In other words, the state, by upholding the rule of law (particularly property law), is providing the ultra wealthy with a service of far greater value than that which it provides those with lower wealth/income.
  - prostoalex 11y ago
    Those who are wealthy are generally not high-income (at least they can heavily tweak their income by using asset-backed loans and accrue capital gains only when it's beneficial). Those who are high income in California are generally not wealthy (as opposed to everyone's favorite high income poster boy - the NY hedge fund manager), but are subjects to windfall effect - a few years of work at below market wages in hopes for a giant payback (royalties in Hollywood, stock options of a successful tech startup in the Valley).
- djsumdog 11y ago
  I agree entirely. I just moved to a tech city and make totally insane amounts of money. I looked at my tax burden and it's close to 30%..and I'm totally okay with that. My take home is still insane, even after the insane housing costs. It bothers me a bit though. I'd actually rather earn less and things be more affordable. The homeless situation in the city I moved to is truly insane and unsustainable. Tech companies drive up prices. I have a friend who lives in a neighbourhood where all the homes were around $100k when she was a kid; and now the same homes can go anywhere from $500k to nearly a million! You see some of the average working class taking those big payouts and moving further from the city (and potentially driving more; increasing the traffic problem). I'd rather earn less, my housing be more affordable and things be more equal for everyone. Supply and demand for housing really drive these crazy swings in gentrification.
  - jacobush 11y ago
    Move to Sweden. We are on the same curve but far behind...
avalaunch 11y ago
When two people order a steak, regardless of their income, they get the same thing. On the other hand, one of the largest services a government offers its citizens is protection of the citizens' persons and wealth, both from domestic and foreign threats. The value of that protection is relative to how much each citizen is worth. If you're in debt, like many Americans, you're basically getting protection only for your person, as you have little to no wealth to protect. On the other hand, if you're worth billions, the government is protecting your wealth as well. It only makes sense that the more you have to protect, the more you should have to pay.
- aantix 11y ago
  So, do you think you should pay more for Internet service if you consume more bandwidth? Or is it just a commodity that we all utilize and is payed for with a flat rate, regardless of the value/un-value is provides?
- jasode 11y ago
  > The value of that protection is relative to how much each citizen is worth. [...] On the other hand, if you're worth billions, the government is protecting your wealth as well. It only makes sense that the more you have to protect, the more you should have to pay. Fyi, those sentences in your reasoning are already handled by a hypothetical flat tax percentage. It's the percentage that handles your cases as you stated them. For example, if a flat 15% tax was applied for everyone, the billionaire earning $30 million pays $4500000 in taxes, while the Walmart earning $20k pays $3000. Mathematically, 4500000 is greater than 3000. In that case, the billionaire has paid more taxes which satisfies your reasoning. On the other hand, the previous posters were emphasizing "progressive" taxes. That means that the percentages themselves are increased as income increases. Your rationale isn't specific to that. Probably the most common math rationale for progressive taxation is the concept of marginal utility of money[1]. In other words, a billionaire's $1 million of money made between $29 million and $30 million is less significant to him and therefore, can be taxed at a more "progressive" tax rate of 40% instead of 15%. On the other hand, the Walmart employees $1000 from $3000 to $4000 pays for food and rent and is not discretionary play money. [1]https://en.wikipedia.org/wiki/Marginal_utility https://en.wikipedia.org/wiki/Marginal_utility
sbov 11y ago
Based upon your example, you seem to be arguing for a flat (as in dollar amount) tax. I have no idea how that would ever work unless there were no taxes at all.
- aantix 11y ago
  Yes. No taxes except for the flat tax.
  - adwf 11y ago
    And how would the government pay for things? Clearly even with 200mn people, each paying $2000 in tax, you'd only have $400bn in tax revenue. The current total US tax revenue is $6.8tn (federal + state + other). If you upped the tax to $10k, you'd still only be talking about $2tn, but you'd have huge swathes of the country forced into poverty as they'd be unable to pay it. You'd need immense corporation taxes in order to make up the shortfall. Currently US business taxes make around 8% of the budget, compared to 36% for income tax. A flat dollar tax is nuts. The rich make their money from the labour of many, many people. They may only personally use the roads the same as others, but the thousands of their employees that need to drive to work need it a thousand times more. Without that, the rich would have no business. Ditto with healthcare. You need your workers healthy and they can't afford healthcare, you pay for it or you soon won't have many workers. $10k does not pay for much healthcare. Blindness to the social costs that are picked up by the government, does not mean that they don't exist. The rich can pay a bit more and still be rich. They need to pay a bit more or they won't be rich for long, their workers and customers won't exist anymore.

by aantix 11y ago

matthewmacleod 11y ago

Oh, come on. I know you get it. Taxation is a generally accepted necessary evil way to fund projects and services for the common good. A progressive tax policy recognises that a person with a high income can bear a greater burden; taxing a minimum wage earner 30% of their income would have a much higher proportional effect on quality of life that someone earning, say, 200k. We seem to accept progressive taxation as fair, in the sense that it causes no more inconvenience to low earners than high earners. The comparison with a private commercial service is flawed, in the sense that engagement with it is an entirely personal choice.

msandford 11y ago
> The comparison with a private commercial service is flawed, in the sense that engagement with it is an entirely personal choice. That's exactly what a lot of people are up in arms about, they get taxed hugely but get no real say in how the money is spent. Sure they get a vote, but if your candidate loses it's not as though you're exempt from paying taxes. In some way these people are right; if they choose to engage in commerce they aren't being forced to do anything and as such "whatever the market will bear" is a good metric. Taxes aren't about "whatever the market will bear" though because you don't have a choice to not consume and therefore not pay.
oldmanjay 11y ago
A "progressive" tax policy is so named because it hijacks the positive associations of the word for political gain. Patiently explaining why we should all love the definition doesn't actually address the point being made.
- matthewmacleod 11y ago
  Wait, what? I'm pretty sure it's called 'progressive' because the rate of taxation 'progresses' as income increases – not because of any association with progressivism per se.
theseatoms 11y ago
An argument I've heard for income tax progressivity is that the very wealthy have far more to lose if the state crumbled and society devolved into a state of nature. In other words, the state, by upholding the rule of law (particularly property law), is providing the ultra wealthy with a service of far greater value than that which it provides those with lower wealth/income.
- prostoalex 11y ago
  Those who are wealthy are generally not high-income (at least they can heavily tweak their income by using asset-backed loans and accrue capital gains only when it's beneficial). Those who are high income in California are generally not wealthy (as opposed to everyone's favorite high income poster boy - the NY hedge fund manager), but are subjects to windfall effect - a few years of work at below market wages in hopes for a giant payback (royalties in Hollywood, stock options of a successful tech startup in the Valley).
djsumdog 11y ago
I agree entirely. I just moved to a tech city and make totally insane amounts of money. I looked at my tax burden and it's close to 30%..and I'm totally okay with that. My take home is still insane, even after the insane housing costs. It bothers me a bit though. I'd actually rather earn less and things be more affordable. The homeless situation in the city I moved to is truly insane and unsustainable. Tech companies drive up prices. I have a friend who lives in a neighbourhood where all the homes were around $100k when she was a kid; and now the same homes can go anywhere from $500k to nearly a million! You see some of the average working class taking those big payouts and moving further from the city (and potentially driving more; increasing the traffic problem). I'd rather earn less, my housing be more affordable and things be more equal for everyone. Supply and demand for housing really drive these crazy swings in gentrification.
- jacobush 11y ago
  Move to Sweden. We are on the same curve but far behind...

avalaunch 11y ago

When two people order a steak, regardless of their income, they get the same thing. On the other hand, one of the largest services a government offers its citizens is protection of the citizens' persons and wealth, both from domestic and foreign threats. The value of that protection is relative to how much each citizen is worth. If you're in debt, like many Americans, you're basically getting protection only for your person, as you have little to no wealth to protect. On the other hand, if you're worth billions, the government is protecting your wealth as well. It only makes sense that the more you have to protect, the more you should have to pay.

aantix 11y ago
So, do you think you should pay more for Internet service if you consume more bandwidth? Or is it just a commodity that we all utilize and is payed for with a flat rate, regardless of the value/un-value is provides?
jasode 11y ago
> The value of that protection is relative to how much each citizen is worth. [...] On the other hand, if you're worth billions, the government is protecting your wealth as well. It only makes sense that the more you have to protect, the more you should have to pay. Fyi, those sentences in your reasoning are already handled by a hypothetical flat tax percentage. It's the percentage that handles your cases as you stated them. For example, if a flat 15% tax was applied for everyone, the billionaire earning $30 million pays $4500000 in taxes, while the Walmart earning $20k pays $3000. Mathematically, 4500000 is greater than 3000. In that case, the billionaire has paid more taxes which satisfies your reasoning. On the other hand, the previous posters were emphasizing "progressive" taxes. That means that the percentages themselves are increased as income increases. Your rationale isn't specific to that. Probably the most common math rationale for progressive taxation is the concept of marginal utility of money[1]. In other words, a billionaire's $1 million of money made between $29 million and $30 million is less significant to him and therefore, can be taxed at a more "progressive" tax rate of 40% instead of 15%. On the other hand, the Walmart employees $1000 from $3000 to $4000 pays for food and rent and is not discretionary play money. [1]https://en.wikipedia.org/wiki/Marginal_utility https://en.wikipedia.org/wiki/Marginal_utility

sbov 11y ago

Based upon your example, you seem to be arguing for a flat (as in dollar amount) tax. I have no idea how that would ever work unless there were no taxes at all.

aantix 11y ago
Yes. No taxes except for the flat tax.
- adwf 11y ago
  And how would the government pay for things? Clearly even with 200mn people, each paying $2000 in tax, you'd only have $400bn in tax revenue. The current total US tax revenue is $6.8tn (federal + state + other). If you upped the tax to $10k, you'd still only be talking about $2tn, but you'd have huge swathes of the country forced into poverty as they'd be unable to pay it. You'd need immense corporation taxes in order to make up the shortfall. Currently US business taxes make around 8% of the budget, compared to 36% for income tax. A flat dollar tax is nuts. The rich make their money from the labour of many, many people. They may only personally use the roads the same as others, but the thousands of their employees that need to drive to work need it a thousand times more. Without that, the rich would have no business. Ditto with healthcare. You need your workers healthy and they can't afford healthcare, you pay for it or you soon won't have many workers. $10k does not pay for much healthcare. Blindness to the social costs that are picked up by the government, does not mean that they don't exist. The rich can pay a bit more and still be rich. They need to pay a bit more or they won't be rich for long, their workers and customers won't exist anymore.