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Flat taxes are not the fairest taxes for a very simple reason: the decreasing marginal utility of money. https://www.investopedia.com/terms/l/lawofdiminishingut
by barrkel 8y ago
Flat taxes are not the fairest taxes for a very simple reason: the decreasing marginal utility of money. https://www.investopedia.com/terms/l/lawofdiminishingutility.asp https://www.investopedia.com/terms/l/lawofdiminishingutility...
If you're poor, a tax - no matter how small - affects things like food expenditure.
If you're income rich, the difference tax makes affects things like what kind of car you buy or what quality of hotel you stay at when you're on vacation.
These are not like for like tradeoffs, they're qualitatively different.
- devereaux 8y agoDecreasing marginal utility of money is just a theory, and there are many flaws in the theory - including measuring happiness with a discrete scale of questionable boundaries (5=very happy, etc.), considering self administered questions at face value, etc. Another theory is hedonic adaptation- you adapt to whatever and regress to a baseline. Finally, there seems to be proof that some people do not spent their money on what will make them happier, the typical example being buying an object instead of an experience.
- barrkel 8y agoIf you are seriously suggesting that a penny is worth the same to a wealthy man as a child, we cannot have a serious conversation.