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> Ideally you would want to exclude the expenses incurred to sustain a reasonable minimum quality of life and only consider taxation on income in excess of that
by hackuser 9y ago
> Ideally you would want to exclude the expenses incurred to sustain a reasonable minimum quality of life and only consider taxation on income in excess of that
I don't agree that is ideal. Ideally, everyone makes an equal sacrifice. What is an equal sacrifice?
* Everyone could pay the exact same amount of tax, let's say $15K. But that is not equal sacrifice; some people can afford $15K much more easily than others (especially those who don't have $15K).
* Everyone could pay the same percentage of their income, let's say 17%. That also is not equal sacrifice: If you earn $1 million, you can afford to give up 17% of it much more easily than if you earn $10,000.
* Tiered progressive tax rates: These can be equal, if calibrated effectively. It will never be perfect and always up for debate, but it can be done pretty well.
- tunesmith 9y agoIt's generally accepted that the value of money is roughly logarithmic as it increases. A logarithmic flat tax could look something like this: 1) Figure how many times poverty rate you make in revenue (2x, 3x, whatever) 2) Take the log base 10 3) Multiply by some flat constant that is the same for everyone, so that the total national amount taxed is how much the US needs. Last I checked, that flat constant would be around 9. 4) The result is what percentage of your revenue you should pay in taxes. Currently, we are far from logarithmic. Under this scheme, pretty much everyone reading this board would pay less taxes. Bill Gates pays about the right amount. Exxon would pay more. Useful as a thought experiment to explore how far away we are from a fair level of progressive taxation.
- hackuser 9y agoThanks. > It's generally accepted that the value of money is roughly logarithmic as it increases I assume that is economic theory; do you remember whose or have any pointers to where I can read more?
- tunesmith 9y agoI think it was Bernoulli that first talked about the logarithmic relationship of utility and value. That was back in the 1700's. I believe there have also been empirical studies that suggest that it holds up in experiments, etc.