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Right now we charge someone who earns their lifetime income in 20 years much more tax than someone else who earns the same total income over 40 years. A change
by iguy 8y ago
Right now we charge someone who earns their lifetime income in 20 years much more tax than someone else who earns the same total income over 40 years. A change like this would remove this unfairness, but to collect the same total amount (over say 60 years for both now) the brackets would surely be different.
- bradleyjg 8y agoIf you get the same amount of money and then twenty years of leisure, surely you are meaningfully better off than someone that had to work forty years for it?
- iguy 8y agoFair point. How about a decade off raising kids?
- bradleyjg 8y agoI'm sure it isn't intended this way, but this feels a little like a trick question. Certainly there are benefits to society to people having children and raising them well. But I don't think anyone has children and takes a decade off to raise them because it benefits society. Rather they do so because it is something they want to do. Give that, if we take someone that made $x dollars over 40 years of work and someone else that made $x dollars over 30 years of work and took ten years off to raise kids, I would say the latter is better off. That said, maybe we want to adjust the tax system to favor the that second person anyway because of the spillover benefits, but that's a different question than who is better off.
- iguy 8y agoSorry not intended as snark, I do think you raise a good point, and may yet dim my enthusiasm for pure consumption taxes. But would be good to generate more examples to think through. One unfairness is people who have spiky incomes, like a guy who repeatedly builds companies & sells them off, 4 years on ramen & 1 big payoff -- it does seem unfair to put him in the tax bracket of those with 5 times his average income. I have an idea many countries would let him smooth this out already, but don't know the details.