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It will only tax higher income people at a lower rate if those higher income people don't receive any tangible benefits from high income. That's a good thing -

It will only tax higher income people at a lower rate if those higher income people don't receive any tangible benefits from high income. That's a good thing - the person who receives a lot from society will pay high taxes, while the person who receives a little will pay low taxes. In contrast, with income taxes, the person who produces a lot for society will pay high taxes. It's well accepted by economists that a consumption tax is the least distortionary tax.

tptacek 10y ago
Your argument depends on a stipulation of the definition of "fairness" where the persons most easily associated with production are entitled to the most favorable tax treatment. Without that assumption, all you're saying is that just as there is a suboptimal tax system that is least expensive to collect, so too there's a suboptimal tax system that is least distortionary to the economy. There are notions of fairness that aren't premised on the idea that tax rates aren't a point score system for rating people, and it can be rational to accept some degree of distortion so long as it's not so powerful that it prevents the economy from serving its purpose (and so long as that distortion is buying us something).
- yummyfajitas 10y ago
  I'm making two arguments. One is based on the economic concept of distortion - people making choices they wouldn't make absent the taxes. That's a strictly positive claim and it's not based on cost to collect. The other is the normative one. My premise is that people should pay in proportion to the benefit they receive from society. Do you disagree with this claim?
  - tptacek 10y ago
    I agree with your positive claim. Some tax systems are more distortionary than others. I think it's likely that consumption taxes are less distortionary than income taxes. I don't think I agree with your normative claim. I think ceteris paribus that it's a virtue of a tax system if people pay in proportion to the value they get out of society. It sounds like you think that virtue is controlling. I think there are other virtues as well.
    - grinnbearit 10y ago
      People get value out of a society by consuming goods and services, income is how we as a society measure the value a person provides. Income Tax taxes value provided, Consumption Tax taxes value consumed. -- Consumption taxes can also be scaled/slabbed with the amount consumed, they don't have to be regressive.
Retra 10y ago
Most of the benefits I've received of my higher income are intangible: social security, medical and dental security, mental well-being, confidence, social status, trust, financial fortitude, and respect.
- yummyfajitas 10y ago
  Social security and medical security are tangible. I don't know what "financial fortitude" means. The remainder are things money can't buy. A beautiful woman who is broke has most of them - should we impose the same taxes on her?

tptacek 10y ago

Your argument depends on a stipulation of the definition of "fairness" where the persons most easily associated with production are entitled to the most favorable tax treatment. Without that assumption, all you're saying is that just as there is a suboptimal tax system that is least expensive to collect, so too there's a suboptimal tax system that is least distortionary to the economy. There are notions of fairness that aren't premised on the idea that tax rates aren't a point score system for rating people, and it can be rational to accept some degree of distortion so long as it's not so powerful that it prevents the economy from serving its purpose (and so long as that distortion is buying us something).

yummyfajitas 10y ago
I'm making two arguments. One is based on the economic concept of distortion - people making choices they wouldn't make absent the taxes. That's a strictly positive claim and it's not based on cost to collect. The other is the normative one. My premise is that people should pay in proportion to the benefit they receive from society. Do you disagree with this claim?
- tptacek 10y ago
  I agree with your positive claim. Some tax systems are more distortionary than others. I think it's likely that consumption taxes are less distortionary than income taxes. I don't think I agree with your normative claim. I think ceteris paribus that it's a virtue of a tax system if people pay in proportion to the value they get out of society. It sounds like you think that virtue is controlling. I think there are other virtues as well.
  - grinnbearit 10y ago
    People get value out of a society by consuming goods and services, income is how we as a society measure the value a person provides. Income Tax taxes value provided, Consumption Tax taxes value consumed. -- Consumption taxes can also be scaled/slabbed with the amount consumed, they don't have to be regressive.

Retra 10y ago

Most of the benefits I've received of my higher income are intangible: social security, medical and dental security, mental well-being, confidence, social status, trust, financial fortitude, and respect.

yummyfajitas 10y ago
Social security and medical security are tangible. I don't know what "financial fortitude" means. The remainder are things money can't buy. A beautiful woman who is broke has most of them - should we impose the same taxes on her?