4 ms·

The reason I put fairer in quotes is because it is a term that can be argued over. Yes two bands, with the focus on making it attractive for people to earn mon

The reason I put fairer in quotes is because it is a term that can be argued over. Yes two bands, with the focus on making it attractive for people to earn money and pay tax, ideally the 0% band would be just enough to clothe, feed yourself and pay rent in a bad neighbourhood. Progressive is a word that seems to mean different things to the left and the right, I notice you didn't define it. As I said a flat tax is economically progressive because it doesn't discourage people from trying to earn more money. At the moment you have people buying houses they don't need or using complex financial instruments just to do something with their money because if they don't they will get taxed more. Investing this money for the sake of it is not always beneficial to the economy or society, I favour a persons right to choose what to do with their own money. I am coming from this from a libertarian perspective, whether you earn 50k a year or 500k the government should not be taking a higher percentage from you than other people. Especially considering that with a percentage rate whilst the proportion is the same, the actual amount of tax high earners pay is greater (which is socially progressive enough for me, but perhaps not for you). I believe I am using the word proportion correctly here, but if not please feel free to let me know how I have got it wrong. Here in the UK the top rate of tax is 50%. I doubt I will ever be taxed at that rate but the government taking half a persons income scares me a little, no wonder people try to move their money around so the taxman can't get at it.

ZachPruckowski 15y ago
>Progressive is a word that seems to mean different things to the left and the right, I notice you didn't define it. "Progressive" has a very specific meaning when you're discussing tax structure, independent of its political meaning. Specifically, a progressive tax is one in which the effective rate you pay rises with income.
- gaius 15y ago
  It's a word that has been at best deliberately overloaded, and at worst hijacked. Who would want to stand in the way of "progress"? It could equally well mean, the more you earn they more you get to keep.
  - krschultz 15y ago
    No, it is a description of the tax code. It is not a judgement of the tax code. It is a 'progressive tax' or 'progressive tax rate'. It has nothing to do with 'progress' or the 'Progressive party'. http://en.wikipedia.org/wiki/Progressive_tax http://en.wikipedia.org/wiki/Progressive_tax
    - onemoreact 15y ago
      Yes, but people call our taxcode Progressive, when as Buffet point's out it's regressive at the top.
seabee 15y ago
'Progressive' as used in the same context as your original post is basically a placeholder for 'benefiting the groups I care about'. It's not a meaningful word to use, and you even know that. Contrast with 'progressive tax', which is well-defined. I don't understand the line of thinking which effectively says "people don't want to earn £2 if they have to pay £1 in tax". Erm, you're still richer than you were if you didn't earn more. The only possible argument against this is if earning another £100k takes more amount of effort it took to earn your first £100k. But if you know anything about making money it doesn't work that way. With more capital comes greater opportunities. You can afford an accountant to manage your money, you have more investment options, and so forth; and you still have enough to spare for a comfortable lifestyle. A flat tax implies that a dollar is worth just as much to Warren Buffett as it is to someone flipping burgers, which demonstrates a complete lack of perspective. Put it this way: everyone's living expenses are, say, £12k. now if you're earning a median wage that leaves you £10k to invest how you like. If you're earning £50k you get to invest £38k. assuming the schemes offer the same rate of return, guess who is going to amass £50k first? Hint: it's not the guy who has to get a 5x return on his investment. The higher rate income tax is an incentive to invest the money you receive back into the economy via business or charity, where it is taxed at a lower rate or even not at all, rather than spent on your own personal gain. Why should it scare you that the government would take that money? BTW, investment in financial instruments of dubious benefit is giving money to the financial system (this should really be obvious...) so it does contribute to the economy, but there are almost certainly better ways to do so. The problem with the libertarian perspective is that it irrationally assumes the best of people when there is no incentive for them to do so. If a billionnaire can afford to fund all the services he requires that someone on the poverty line would depend on government for, why should the billionnaire give his money away? If you want a society you have an obligation to provide for one, if you believe it is unfair that someone with broader shoulders should carry more weight, then perhaps you should consider how fair it is that he has broader shoulders and others do not.
- true_religion 15y ago
  > if earning another £100k takes more amount of effort it took to earn your first £100k. That's not the issue. The issue is that the 2nd 100k is worth less in terms of happiness than the first. Various studies have shown that after around 80,000 peoples happiness is proportional to the amount of money they earn, and after that it levels out. Thus if one didn't really care too much about that 2nd 100k, making it merely 50k might just be enough for the person to throw up their hands and say "its not worth it, I'll spend the weekends at home instead of at work".
krschultz 15y ago
You clearly don't understand what the definition of 'progressive' tax is. It's 'progressive' in the sense that marginal tax rates increase as you make more money. It is not 'progressive' as in 'progressive politics' or 'economic progress' or any other left or right politics. Saying something is a 'pregressive tax' isn't a value judgement , it is just a description of the curve of the tax rate, i.e. the opposite of a regressive tax. As for 'discouraging people from trying to earn more money', that is a debate about rates but remember marginal tax rates never allow a situation where making a higher salary would leave you with less net income.

ZachPruckowski 15y ago

>Progressive is a word that seems to mean different things to the left and the right, I notice you didn't define it. "Progressive" has a very specific meaning when you're discussing tax structure, independent of its political meaning. Specifically, a progressive tax is one in which the effective rate you pay rises with income.

gaius 15y ago
It's a word that has been at best deliberately overloaded, and at worst hijacked. Who would want to stand in the way of "progress"? It could equally well mean, the more you earn they more you get to keep.
- krschultz 15y ago
  No, it is a description of the tax code. It is not a judgement of the tax code. It is a 'progressive tax' or 'progressive tax rate'. It has nothing to do with 'progress' or the 'Progressive party'. http://en.wikipedia.org/wiki/Progressive_tax http://en.wikipedia.org/wiki/Progressive_tax
  - onemoreact 15y ago
    Yes, but people call our taxcode Progressive, when as Buffet point's out it's regressive at the top.

seabee 15y ago

'Progressive' as used in the same context as your original post is basically a placeholder for 'benefiting the groups I care about'. It's not a meaningful word to use, and you even know that. Contrast with 'progressive tax', which is well-defined. I don't understand the line of thinking which effectively says "people don't want to earn £2 if they have to pay £1 in tax". Erm, you're still richer than you were if you didn't earn more. The only possible argument against this is if earning another £100k takes more amount of effort it took to earn your first £100k. But if you know anything about making money it doesn't work that way. With more capital comes greater opportunities. You can afford an accountant to manage your money, you have more investment options, and so forth; and you still have enough to spare for a comfortable lifestyle. A flat tax implies that a dollar is worth just as much to Warren Buffett as it is to someone flipping burgers, which demonstrates a complete lack of perspective. Put it this way: everyone's living expenses are, say, £12k. now if you're earning a median wage that leaves you £10k to invest how you like. If you're earning £50k you get to invest £38k. assuming the schemes offer the same rate of return, guess who is going to amass £50k first? Hint: it's not the guy who has to get a 5x return on his investment. The higher rate income tax is an incentive to invest the money you receive back into the economy via business or charity, where it is taxed at a lower rate or even not at all, rather than spent on your own personal gain. Why should it scare you that the government would take that money? BTW, investment in financial instruments of dubious benefit is giving money to the financial system (this should really be obvious...) so it does contribute to the economy, but there are almost certainly better ways to do so. The problem with the libertarian perspective is that it irrationally assumes the best of people when there is no incentive for them to do so. If a billionnaire can afford to fund all the services he requires that someone on the poverty line would depend on government for, why should the billionnaire give his money away? If you want a society you have an obligation to provide for one, if you believe it is unfair that someone with broader shoulders should carry more weight, then perhaps you should consider how fair it is that he has broader shoulders and others do not.

true_religion 15y ago
> if earning another £100k takes more amount of effort it took to earn your first £100k. That's not the issue. The issue is that the 2nd 100k is worth less in terms of happiness than the first. Various studies have shown that after around 80,000 peoples happiness is proportional to the amount of money they earn, and after that it levels out. Thus if one didn't really care too much about that 2nd 100k, making it merely 50k might just be enough for the person to throw up their hands and say "its not worth it, I'll spend the weekends at home instead of at work".

krschultz 15y ago

You clearly don't understand what the definition of 'progressive' tax is. It's 'progressive' in the sense that marginal tax rates increase as you make more money. It is not 'progressive' as in 'progressive politics' or 'economic progress' or any other left or right politics. Saying something is a 'pregressive tax' isn't a value judgement , it is just a description of the curve of the tax rate, i.e. the opposite of a regressive tax. As for 'discouraging people from trying to earn more money', that is a debate about rates but remember marginal tax rates never allow a situation where making a higher salary would leave you with less net income.