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The argument isn’t about whether the quantum of taxes is appropriate. It is how a fixed quantum turns a disincentive for some into an irrelevancy to others. If
by voisin 8y ago
The argument isn’t about whether the quantum of taxes is appropriate. It is how a fixed quantum turns a disincentive for some into an irrelevancy to others. If the purpose of the cost is to discourage use (peak period congestion charges), then it should vary with income so as to be a equally discouraging to all to whom it applies. For your example of trash collection, by having a fixed fee the state creates a greater incentive among the poor to reduce their trash production, whereas the rich aren’t affected and can produce far more before they feel the incentive to reduce waste.
I think the parking spot item is more like a meal at a fine restaurant - there is no incentive or disincentive from a social standpoint that should justify variable pricing on income. But to the extend there is, say via congestion, pollution, etc, it is reasonable to vary pricing in order to equally apply the disincentive.
- ramblerouser 8y agoA poor person's car takes up the same number of parking spaces as a rich person's car, and a rich person has already paid a huge amount of their income to the poor person in the form of income taxes and welfare.
- pas 8y agopoor might mean lower middle-class. no welfare income.
- devereaux 8y ago> it is reasonable to vary pricing in order to equally apply the disincentive. No, it's not reasonable. The goal is not to discourage use, but to price in the negative externality. > For your example of trash collection, by having a fixed fee the state creates a greater incentive among the poor to reduce their trash production, And that's good, even if we suppose your argument is right. Bear with me: what's the percentage of the population in your country that you would call "rich"? Let's say 20%. Do you think that 20% of the population can create more bags of trash than 80% of the population? I don't think so. In the parking example, do you think 20% of the population can park more cars than 80% of the population? I don't think so either. Someone rich may have more than one car, but I strongly doubt they are able to drive 2 cars at once.
- adrianN 8y agoI'm pretty sure 5% of the population can create more of whatever negative externality you'd like to tax than the lower 95%. Someone rich might not drive a car at all and instead take a private jet. An average person from the US produces fifty times as much CO2 as an average person from Kenya.
- devereaux 8y agoIf we were talking about CO2, I'd agree with you. But we are talking about parking spaces, and production of trash within a country.
- seniorsassycat 8y ago> Do you think that 20% of the population can create more bags of trash than 80% of the population? I don't think so. I live in a wealthy household, our discarded amazon packaging, food and meal delivery garbage is easily 4x the garbage produced by a penny pinching household. And so far my housemates and I haven't reduced our consumption because the garbage collection fees do not outweigh the convenience of online shopping.
- voisin 8y agoThe point is not the number of cars or trash bags. It is the incentive to use a vehicle or generate a bag of trash. If a $20/day charge is out of reach for the poor, 100% of the poor will avoid parking and take public transit. If $20/day is meaningless to someone that makes $500k/year, then they will not factor that into their decision to drive versus take public transit. So for those that set prices, does it matter whether demand elasticity is equal across income levels or not?