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Right but your costs are not reduced by a similar amount. When I purchase things or take out a loan for a personal expense I have to pay that off with post-tax
by nightski 9y ago
Right but your costs are not reduced by a similar amount. When I purchase things or take out a loan for a personal expense I have to pay that off with post-tax dollars. So I have to earn more money to buy the same things.
In this regard a large tax greatly reduces purchasing power and makes it less worth the trouble.
- themacguffinman 9y agoThat's why taxes are typically progressive instead of flat. Progressive taxes only significantly impact your purchasing power for luxuries while minimally curtailing your budget for essentials and regular goods.