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> I would approach any plan that claims it can decrease inequality via taxes with a highly critical eye. Progressive taxation is very effective at decreasing i

> I would approach any plan that claims it can decrease inequality via taxes with a highly critical eye. Progressive taxation is very effective at decreasing inequality. What is your alternative?

varispeed 5y ago
Progressive tax is like a fence - it keeps people in perpetual poverty. The harder they try to escape, the increasingly more tax they have to pay and increasingly harder it is to save capital. People mistakenly think that higher tax brackets are paid by the rich - they can afford creative accountants and are being remunerated largely outside of ways regular folk are being paid and thus often avoiding tax altogether. Progressive tax is designed so that people can't amass capital to start their own business with their own hands. They have to be at the mercy of bankers or the rich acting as gatekeepers, so that if you have a business idea you have to effectively ask for their permission and maybe they'll lend you money. If you don't have these ambitions, it ensures that your children will have the same or worse start than yourself. I am against a tax system that punishes hard working individuals and gives a free pass for those already wealthy and big corporations. Engineers likely pay 50% tax rate in Western countries and for wealthy people it's way below 10%.
- alecst 5y ago
  You're saying progressive taxation keeps people in poverty. The definition of progressive taxation is taxing the poor less and the rich more. Do you therefore see taxing the poor more as a means of elevating them out of poverty? That's the first thing. The second thing is: > I am against a tax system that punishes hard working individuals and gives a free pass for those already wealthy and big corporations. This is exactly the problem a progressive tax system is supposed to solve.
  - nmhancoc 5y ago
    Progressive _income_ taxes tax higher income people more and higher income people less. This has a <1 correlation with wealth (richness) and poverty. You can control a lot of assets with relatively low income via debt (the interest of which doesn’t isn’t taxed, frequently), and can have relatively few assets with high income (a sports player, for example, in part because their careers have intrinsically low shelf lives due to physical requirements). Related to that last point, progressive income taxes also charge people differential tax burdens based on the “density” of their earnings, even if they have the same lifetime earnings. (Compare a football player who makes all his money from 20-25 to a surgeon who makes the same amount of money from 30-65. Because the football player makes more money per year, he’ll pay higher taxes than the surgeon even if they make the same overall income. This is despite the fact there is 0 ability of the football player to maintain his income at 65.) The above poster would probably view capital gains tax increases as also doing the same thing. Additionally, these policies are often paired with other social spending (like Cal’s phase-out of asset tests for Medicaid, that privilege the older, asset owning strata at the cost of younger, income rich but asset poor strata). LVT, wealth taxes, or even sales taxes do not have these features and, perhaps coincidentally perhaps not, have been beyond the pale politically for a century.
- Hokusai 5y ago
  And what is your alternative?
imtringued 5y ago
Before politicians get silly ideas like progressive taxation we must tell them about extremely ineffective tax systems that burden the poor even more and occupy politicians with bad ideas. It sort of reminds me of what "Die Linke"("the left") party in Germany did in Berlin. A long long time ago they sold publicly owned apartments for pennies. A year ago they introduced rent control, which is primarily hurting small private landlords and makes the big landlords just wait it out instead of renting at an absurd price point. So small landlords sell to big landlords because renting out apartments was banned, landlords sell their apartments because that is the only thing allowed by law. Once enough small landlords exited the market, rent control was pulled out raising the value of properties back to its original level. Finally, the government bought huge amounts of apartments from the big real estate companies. Effectively paying them to decimate the small landlords. I don't know if this was planned but if I was an investor in those companies it would be awfully convenient. How can anyone call this chain of events successful? The fact that "Die Linke" party is against a land value tax which could have avoided all of these bad policy ideas does not inspire confidence. Either they are incompetent, were manipulated or they are hypocrites. I can imagine all three to be the case but I would personally bet on manipulation by special interests because applying reverse psychology to lobbyism does not sound very difficult.

> I would approach any plan that claims it can decrease inequality via taxes with a highly critical eye. Progressive taxation is very effective at decreasing inequality. What is your alternative?

varispeed 5y ago

Progressive tax is like a fence - it keeps people in perpetual poverty. The harder they try to escape, the increasingly more tax they have to pay and increasingly harder it is to save capital. People mistakenly think that higher tax brackets are paid by the rich - they can afford creative accountants and are being remunerated largely outside of ways regular folk are being paid and thus often avoiding tax altogether. Progressive tax is designed so that people can't amass capital to start their own business with their own hands. They have to be at the mercy of bankers or the rich acting as gatekeepers, so that if you have a business idea you have to effectively ask for their permission and maybe they'll lend you money. If you don't have these ambitions, it ensures that your children will have the same or worse start than yourself. I am against a tax system that punishes hard working individuals and gives a free pass for those already wealthy and big corporations. Engineers likely pay 50% tax rate in Western countries and for wealthy people it's way below 10%.

alecst 5y ago
You're saying progressive taxation keeps people in poverty. The definition of progressive taxation is taxing the poor less and the rich more. Do you therefore see taxing the poor more as a means of elevating them out of poverty? That's the first thing. The second thing is: > I am against a tax system that punishes hard working individuals and gives a free pass for those already wealthy and big corporations. This is exactly the problem a progressive tax system is supposed to solve.
- nmhancoc 5y ago
  Progressive _income_ taxes tax higher income people more and higher income people less. This has a <1 correlation with wealth (richness) and poverty. You can control a lot of assets with relatively low income via debt (the interest of which doesn’t isn’t taxed, frequently), and can have relatively few assets with high income (a sports player, for example, in part because their careers have intrinsically low shelf lives due to physical requirements). Related to that last point, progressive income taxes also charge people differential tax burdens based on the “density” of their earnings, even if they have the same lifetime earnings. (Compare a football player who makes all his money from 20-25 to a surgeon who makes the same amount of money from 30-65. Because the football player makes more money per year, he’ll pay higher taxes than the surgeon even if they make the same overall income. This is despite the fact there is 0 ability of the football player to maintain his income at 65.) The above poster would probably view capital gains tax increases as also doing the same thing. Additionally, these policies are often paired with other social spending (like Cal’s phase-out of asset tests for Medicaid, that privilege the older, asset owning strata at the cost of younger, income rich but asset poor strata). LVT, wealth taxes, or even sales taxes do not have these features and, perhaps coincidentally perhaps not, have been beyond the pale politically for a century.
Hokusai 5y ago
And what is your alternative?

imtringued 5y ago

Before politicians get silly ideas like progressive taxation we must tell them about extremely ineffective tax systems that burden the poor even more and occupy politicians with bad ideas. It sort of reminds me of what "Die Linke"("the left") party in Germany did in Berlin. A long long time ago they sold publicly owned apartments for pennies. A year ago they introduced rent control, which is primarily hurting small private landlords and makes the big landlords just wait it out instead of renting at an absurd price point. So small landlords sell to big landlords because renting out apartments was banned, landlords sell their apartments because that is the only thing allowed by law. Once enough small landlords exited the market, rent control was pulled out raising the value of properties back to its original level. Finally, the government bought huge amounts of apartments from the big real estate companies. Effectively paying them to decimate the small landlords. I don't know if this was planned but if I was an investor in those companies it would be awfully convenient. How can anyone call this chain of events successful? The fact that "Die Linke" party is against a land value tax which could have avoided all of these bad policy ideas does not inspire confidence. Either they are incompetent, were manipulated or they are hypocrites. I can imagine all three to be the case but I would personally bet on manipulation by special interests because applying reverse psychology to lobbyism does not sound very difficult.