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Yes, for people building / buying / selling assets (e.g. entrepreneurs and investors) this generally applies. But your average doctor won't be booking capital g

Yes, for people building / buying / selling assets (e.g. entrepreneurs and investors) this generally applies. But your average doctor won't be booking capital gains on his (earned) income any time soon. Just pointing out that having income taxes that are too high is often counterproductive for society, just because they can easily be avoided by the wealthy. I guess the differentiation (and justification) is mostly a way to make sure the masses who actually use the infrastructure pay more than the one wealthy person who uses it, but don't need it as much.

arethuza 9y ago
Well, wealthy people have have, by definition, more assets that need protection by state provided legal, police and security services - so I would say it is debatable that rich people need the state less.
- charlesdm 9y ago
  Probably. Which is why they pay more (in money terms, but not always in percentage points).
  - logfromblammo 9y ago
    The idea that rich people don't like to pay excessively high taxes, and will avoid doing so if they are able, is not a particularly compelling argument against progressive taxation. I am not proposing that any nation institute a 50% marginal tax rate. I am just saying that I believe that any nation that tries to go higher than that is guaranteed to have tax avoidance schemes that ensure no one ever actually pays that much, whether those schemes are visible to the taxing authority or not. Some people will jump through a maze of hoops just to avoid a 0.1% tax. What I'm saying is that nobody would rationally submit to a scheme wherein they do all the work and someone else reaps the majority of the benefits from it. It goes beyond the limits of the human sense of fairness. A 102% marginal tax rate is so far beyond that, I cannot even imagine circumstances that might lead to anyone actually paying it.

arethuza 9y ago

Well, wealthy people have have, by definition, more assets that need protection by state provided legal, police and security services - so I would say it is debatable that rich people need the state less.

charlesdm 9y ago
Probably. Which is why they pay more (in money terms, but not always in percentage points).
- logfromblammo 9y ago
  The idea that rich people don't like to pay excessively high taxes, and will avoid doing so if they are able, is not a particularly compelling argument against progressive taxation. I am not proposing that any nation institute a 50% marginal tax rate. I am just saying that I believe that any nation that tries to go higher than that is guaranteed to have tax avoidance schemes that ensure no one ever actually pays that much, whether those schemes are visible to the taxing authority or not. Some people will jump through a maze of hoops just to avoid a 0.1% tax. What I'm saying is that nobody would rationally submit to a scheme wherein they do all the work and someone else reaps the majority of the benefits from it. It goes beyond the limits of the human sense of fairness. A 102% marginal tax rate is so far beyond that, I cannot even imagine circumstances that might lead to anyone actually paying it.