12 ms·

Tariffs are a tax on the low and middle class. Upper income people will be fine with a 10-25% increase in cost of things they purchase. Regular income taxes a

Tariffs are a tax on the low and middle class. Upper income people will be fine with a 10-25% increase in cost of things they purchase. Regular income taxes are progressive. Tariffs are not. There is a reason why rich prefer tariffs over a progressive income tax.

justin66 2y ago
> There is a reason why rich prefer tariffs over a progressive income tax. Or sales taxes, or VAT, for that matter.
- tim333 2y ago
  I'm not sure who these rich are who like tariffs apart from Trump? Mostly rich people like low tax and low meddling with trade. I think it's the politicians who like tarrifs as it gives them a way to meddle.
  - justin66 2y ago
    Perhaps that was badly put, but I'm quite certain that the interests in the US who advocate for tariffs are among the wealthy. It would not be accurate to imply that all of the wealthy advocate for tariffs, yes. Tariffs in agriculture, automotive, and all sorts of other things have benefitted corporations and people with a lot of money and cost people who need to buy those things. (I hope I can say that without getting into whether those tariffs also serve the greater good) > Mostly rich people like low tax and low meddling with trade. That's imprecise. America's rich are often unmoved when it's pointed out that their employees pay more taxes than they do as a percentage of income. I'm sure that they like it when their taxes are low.
foobarian 2y ago
Curious that it's rarely mentioned where the tariff collections go. Presumably into the federal budget?
- justin66 2y ago
  Yes. There have been a lot of curious reinterpretations of the law recently but the money raised via tariffs still goes to the treasury.
- rco8786 2y ago
  Of course, just like any other tax revenue
  - giantg2 2y ago
    I think they're talking about if there are earmarks.
dheera 2y ago
In a progressive tax system, the poor end up paying a lot of the taxes of the rich, because the rich tend to own businesses and real estate and they just pass all their income taxes onto the poor in the form of price increases. If you are a middle class person with a salary in the US you are likely paying upwards of 80% in taxes if you include second- and third-order taxes. Your rent could be $1000 instead of $2000 if your landlord's income wasn't taxed so much. Your Chipotle meal could be $6 instead of $12 if the franchise owner and their commercial property landlord weren't taxed so much, let alone the workers.
- arlongparker 2y ago
  Wow what an awful take
- rco8786 2y ago
  So from what you are saying, there is no way to implement taxes that don't primarily target poor people.
  - fireflash38 2y ago
    It's what rich people say lol. Don't tax us, we'll pass it on. Don't tax us we'll move states. Don't tax us we'll move countries. Don't tax us we'll pay CPAs to cheat taxes anyway. Don't tax us we refuse to pay them. Why do people believe rich people again?
- TehCorwiz 2y ago
  The point of a progressive tax structure isn't just lower taxes on the poor and "middle class". It's also to incentivize the wealthy to keep their money moving instead of hoarding it. High tax rates on the wealthy and businesses during the mid-20th century are the reason why the US was an economic powerhouse. It forced companies to invest in capital and labor, and therefore report "lower" income and take capital investment tax write-offs, instead of stock buybacks.
  - njarboe 2y ago
yoyohello13 2y ago
This is why their plan to eliminate income tax and make up the difference with tariffs is just hilariously evil. It's literally shifting tax burden from rich to poor.
- nicce 2y ago
  Ooh. I never thought this from tariffs. Now it makes perfectly sense.
- prometheus76 2y ago
  Rich people don't pay income taxes. They pay capital gains taxes. They typically don't have income, or very little income compared to capital gains.
  - Salgat 2y ago
    And the beauty is that long term capital gains is capped at 20%. That's a lower overall rate than what my family pays in taxes. The rich got it made.
    - polski-g 2y ago
      The top 10% of America pay 75% of all taxes received -- the top 25% pay for 89%. https://www.ntu.org/library/doclib/2024/02/2021-who-pays-2-.pdf https://www.ntu.org/library/doclib/2024/02/2021-who-pays-2-....
      - mkipper 2y ago
        Conveniently, there's no mention of the 0.1% in there, and the historical data comparing the tax contribution of the top 1% to the total tax base doesn't include any information on income and wealth growth of the 1% over that same time period. Weird! But given that the organization who published that was founded by a Newsmax board member, I'm sure they're trying to paint a clear and unbiased picture of things.
      - Salgat 2y ago
giantg2 2y ago
There are other mechanisms than revenue generation at play. That's not to say I'm supporting the tariff, but people who don't want to pay income taxes will support just about any other model regardless of the other effects.
bagels 2y ago
Maybe I'm alone in this, but despite being able to afford to, I'm just not going to be buying as much non-essential stuff to avoid funding these tariffs.
- wesselbindt 2y ago
  Trump's primarily looking to hit the "I live paycheck to paycheck and my washing machine just broke" crowd, I believe. That's about 30% of households.
- gmoot 2y ago
  That is the whole point of Tariffs. To discourage purchase of foreign goods.
  - shigawire 2y ago
    There would have to be a lot of pain to lead to domestically produced consumer electronics. And I'm not sure that end state is even desirable.
    - iteratethis 2y ago
      There's no such thing in a product as complicated as a laptop.
  - insane_dreamer 2y ago
    Right. But are there any locally produced Windows laptops? No company is going to spin up local production for some tariffs that Trump might decide to reverse next week (a-la-Canada).
  - bagels 2y ago
    I'm not buying domestic either. The tariffs are effectively on everything, because nearly everything will have tariffed inputs.
  - tootie 2y ago
    Is it? Is that was Trump said? The US economy is driven by consumer spending and decreasing consumer spending is in nobody's interest.
dpc050505 2y ago
The stocks of wealthy people aren't going to see great performance either when margins and sale volume are lowered by the increases in input costs.
SiliconSplash 2y ago
> Upper income people will be fine with a 10-25% increase in cost of things they purchase. Regular income taxes are progressive. This is assuming you are buying goods that are outside of the country. Most consumption weekly is things like food, drink, disposable items and not things like computer hardware which is refreshed every few years normally. > There is a reason why rich prefer tariffs over a progressive income tax. I am not rich and would prefer Tariffs over income taxes (I am in the UK). I would rather save the that gets taken every month from the taxman and I could afford to buy myself a nicer property. I could also make the conscious decision to make sure I purchase items produced in the UK which presumably for food, drink (at least) I would wager is produced in the UK and thus would be cheaper than things produced outside of the country. As for progressive taxes they actually make it more difficult to earn more money even at a near minimum wage. When I worked at a super store (Tesco) many years ago, If I worked a few hours overtime, I would go over income band for that month and it effectively made working that shift a waste of time. I am including my time to commute which was a 30 minute cycle and not wanting to have to stack onions. So I didn't bother working overtime as a result. Neither did many of my colleges. Granted I normally would get a check back at the end of the year from HMRC as I would have over-payed for the year, but when you are living month to month, I would always prefer the cash in my pocket as the end of the tax year is an eternity away in comparison.
- deleted 2y ago
  [deleted]
- 3vidence 2y ago
  Here's the fun part if you are not wealthy. You would pay both anyways. It's a rigged game, if anything they would use tariffs to cut the progressive rate not the base tax rate anyways.
- hn_throwaway_99 2y ago
  > This is assuming you are buying goods that are outside of the country. Most consumption weekly is things like food, drink, disposable items and not things like computer hardware which is refreshed every few years normally. Trying really hard to refrain from a snarky response, because this analysis is 100% incorrect. First, where do you think a substantial portion of food, drink and disposable items in the US comes from? More importantly, though, the entire economic rationale of import tariffs is to allow domestic producers to charge more. It doesn't matter if you just "buy American", because if the competition that American producers face is now 10% more expensive, these producers will raise prices. Or, if more charitably, foreign goods were making American-made products uncompetitive, American producers can now come in and make those goods, but only at the higher prices. Again, the entire point of tariffs (at least from the perspective of "we want to bring production back to this country") is to raise the price of goods across the board so American producers can be competitive. Also, you misunderstand how progressive taxes work. When you make more and go into "the higher income band", you're not taxed more on ALL your income, just the portion that is in the new band (at least in the US). Yes, there have been cases in the US e.g. with welfare where if people made above a certain amount their welfare was cut off, but those have all been highlighted as examples of poor tax policy that have largely been fixed.
yibg 2y ago
It’s an extremely regressive tax policy too. Not only is it a flat rate for everyone regardless of income, the wealthy spend less as a percent of income than the poor, so less of the income is taxed this way in the first place.
threatofrain 2y ago
Why would rich people prefer tariffs? Only very specific rich people who know how a trade war is going to unfold want tariffs.
- myrmidon 2y ago
  You misunderstand the argument. The population being taxed via tariffs instead of income/capital gains is a net gain for wealthy people always, because they spend a much smaller fraction of their income, and a significant portion of the "tariff-base" is fixed-cost like. Consider an iphone or a washing machine: Basically everyone is gonna pay those tariffs once, it does not matter if you work a construction job or own a whole city block.
rayiner 2y ago
The rich favor free trade. It effectively allows them to outsource production to cheap foreign labor and increase their domestic profits. You’re incorrectly assuming a static system where production doesn’t shift to domestic sources. Yes, tariffs increase prices somewhat for consumers. But they encourage domestic production and domestic jobs. Ask yourself—are Americans better from importing cheap Chinese crap than they were in the 1960s when stuff was made in America?
- SiliconSplash 2y ago
  I notice in almost all these conversations is that many pretend that things will stay exactly the same forever and people won't follow incentives.
- HDThoreaun 2y ago
  > are Americans better from importing cheap Chinese crap than they were in the 1960s when stuff was made in America? Absolutely we are
- munksbeer 2y ago
  How widely do you think this concept applies? Across countries? Across states? Across counties?
hintymad 2y ago
Not to challenge the notion of tax but to seek an answer: what would be a better solution to the deindustrialization of the US then? China has 350X of the shipping building capacity than the US. We couldn't even produce masks fast enough so we had to buy BYD's during the Covid. GM's factory looked like a WII-era run-down workshop compared to BYD's fully-automated factory. DJI took more than 99% of the drone market. Another question how we deal with imbalanced tariffs, like China and Europe could place higher tariff on some products than we do to them.
- rayiner 2y ago
  It’s just the latest memo that went out to neo-“liberals.” Obviously the rich favor free trade. That’s why American liberals consistently opposed free trade until Clinton’s third way approach.
- kibwen 2y ago
  > what would be a better solution to the deindustrialization of the US then? Unfortunately, given the geopolitical necessity, the question is moot. The people of the United States, regardless of what they might claim, do not actually want reindustrialization. It's easy enough to prove: are Americans willing to either accept wage decreases in line with non-Americans, or accept price increases that would cover the cost of paying American wages? The answer is definitively "no", and thus reindustrialization cannot happen. (But machines, you say. Those machines work just as well in China as in America, staffed by Chinese techs who will work for less. This solves nothing.) Americans want to eat their cake and have it too, and unfortunately this is not how reality works. But no politician ever got elected by telling the electorate that what they want is incompatible with reality. No, if the electorate wants a pony, you promise them a pony, and then when the pony fails to show up you blame it on... let me check today's notes... woke DEI communist pony salesmen.
  - cynicalpeace 2y ago
    > are Americans willing to either accept wage decreases in line with non-Americans, or accept price increases that would cover the cost of paying American wages? The answer is definitively "no", and thus reindustrialization cannot happen. The answer is not "definitively" no. Trump ran on tariffs and definitively won. And I know many people (myself included) who would happily "accept price increases that would cover the cost of paying American wages". Most of these people are low/middle income Trump voters. Trump won the $30k-100k voters a year. Harris won all other income brackets.
stretchwithme 2y ago
What evidence is there that "the rich" like tariffs?
- ides_dev 2y ago
  One very rich man is pushing hard to implement some.
glimshe 2y ago
In theory, tariffs have the potential to bring back jobs to a highly industrialized nation like the US, benefitting the poor with more and better jobs. Income tax can't do that.
- qingcharles 2y ago
  Nobody is going to build a manufacturing plant knowing that Trump is only using the tariffs as leverage and they will be rescinded next week. Most of the tariffs he signed in are already gone. And even if they stay during Trump they might get killed in two or four years if the gov shifts sides.
  - glimshe 2y ago
    If that's true, the tariffs won't be a tax on the poor either.
    - qingcharles 2y ago
      True. Or at least, only for a short time.
insane_dreamer 2y ago
this is also why states that don't have a sales tax, like Oregon, have a more equitable tax structure
waltercool 2y ago
Progressive taxes are usually one of the worst and attacks the success, it limits poor people to become middle-class earners, or middle class to get wealthy. Taxes are already a certain percent. It doesn't make any sense to tax more or less percent to people over certain amount of money. At the end, poor people dont want to work because they will lose all benefits and get taxed. Middle class people don't want to earn more than certain amount because they will get taxed more. Because progressive taxes are reliant on certain income (value) or wealth, inflation makes people to pay more taxes over time.

justin66 2y ago

> There is a reason why rich prefer tariffs over a progressive income tax. Or sales taxes, or VAT, for that matter.

tim333 2y ago
I'm not sure who these rich are who like tariffs apart from Trump? Mostly rich people like low tax and low meddling with trade. I think it's the politicians who like tarrifs as it gives them a way to meddle.
- justin66 2y ago
  Perhaps that was badly put, but I'm quite certain that the interests in the US who advocate for tariffs are among the wealthy. It would not be accurate to imply that all of the wealthy advocate for tariffs, yes. Tariffs in agriculture, automotive, and all sorts of other things have benefitted corporations and people with a lot of money and cost people who need to buy those things. (I hope I can say that without getting into whether those tariffs also serve the greater good) > Mostly rich people like low tax and low meddling with trade. That's imprecise. America's rich are often unmoved when it's pointed out that their employees pay more taxes than they do as a percentage of income. I'm sure that they like it when their taxes are low.

foobarian 2y ago

Curious that it's rarely mentioned where the tariff collections go. Presumably into the federal budget?

justin66 2y ago
Yes. There have been a lot of curious reinterpretations of the law recently but the money raised via tariffs still goes to the treasury.
rco8786 2y ago
Of course, just like any other tax revenue
- giantg2 2y ago
  I think they're talking about if there are earmarks.

dheera 2y ago

In a progressive tax system, the poor end up paying a lot of the taxes of the rich, because the rich tend to own businesses and real estate and they just pass all their income taxes onto the poor in the form of price increases. If you are a middle class person with a salary in the US you are likely paying upwards of 80% in taxes if you include second- and third-order taxes. Your rent could be $1000 instead of $2000 if your landlord's income wasn't taxed so much. Your Chipotle meal could be $6 instead of $12 if the franchise owner and their commercial property landlord weren't taxed so much, let alone the workers.

arlongparker 2y ago
Wow what an awful take
rco8786 2y ago
So from what you are saying, there is no way to implement taxes that don't primarily target poor people.
- fireflash38 2y ago
  It's what rich people say lol. Don't tax us, we'll pass it on. Don't tax us we'll move states. Don't tax us we'll move countries. Don't tax us we'll pay CPAs to cheat taxes anyway. Don't tax us we refuse to pay them. Why do people believe rich people again?
TehCorwiz 2y ago
The point of a progressive tax structure isn't just lower taxes on the poor and "middle class". It's also to incentivize the wealthy to keep their money moving instead of hoarding it. High tax rates on the wealthy and businesses during the mid-20th century are the reason why the US was an economic powerhouse. It forced companies to invest in capital and labor, and therefore report "lower" income and take capital investment tax write-offs, instead of stock buybacks.
- njarboe 2y ago

yoyohello13 2y ago

This is why their plan to eliminate income tax and make up the difference with tariffs is just hilariously evil. It's literally shifting tax burden from rich to poor.

nicce 2y ago
Ooh. I never thought this from tariffs. Now it makes perfectly sense.
prometheus76 2y ago
Rich people don't pay income taxes. They pay capital gains taxes. They typically don't have income, or very little income compared to capital gains.
- Salgat 2y ago
  And the beauty is that long term capital gains is capped at 20%. That's a lower overall rate than what my family pays in taxes. The rich got it made.
  - polski-g 2y ago
    The top 10% of America pay 75% of all taxes received -- the top 25% pay for 89%. https://www.ntu.org/library/doclib/2024/02/2021-who-pays-2-.pdf https://www.ntu.org/library/doclib/2024/02/2021-who-pays-2-....
    - mkipper 2y ago
      Conveniently, there's no mention of the 0.1% in there, and the historical data comparing the tax contribution of the top 1% to the total tax base doesn't include any information on income and wealth growth of the 1% over that same time period. Weird! But given that the organization who published that was founded by a Newsmax board member, I'm sure they're trying to paint a clear and unbiased picture of things.
    - Salgat 2y ago

giantg2 2y ago

There are other mechanisms than revenue generation at play. That's not to say I'm supporting the tariff, but people who don't want to pay income taxes will support just about any other model regardless of the other effects.

bagels 2y ago

Maybe I'm alone in this, but despite being able to afford to, I'm just not going to be buying as much non-essential stuff to avoid funding these tariffs.

wesselbindt 2y ago
Trump's primarily looking to hit the "I live paycheck to paycheck and my washing machine just broke" crowd, I believe. That's about 30% of households.
gmoot 2y ago
That is the whole point of Tariffs. To discourage purchase of foreign goods.
- shigawire 2y ago
  There would have to be a lot of pain to lead to domestically produced consumer electronics. And I'm not sure that end state is even desirable.
  - iteratethis 2y ago
    There's no such thing in a product as complicated as a laptop.
- insane_dreamer 2y ago
  Right. But are there any locally produced Windows laptops? No company is going to spin up local production for some tariffs that Trump might decide to reverse next week (a-la-Canada).
- bagels 2y ago
  I'm not buying domestic either. The tariffs are effectively on everything, because nearly everything will have tariffed inputs.
- tootie 2y ago
  Is it? Is that was Trump said? The US economy is driven by consumer spending and decreasing consumer spending is in nobody's interest.

dpc050505 2y ago

The stocks of wealthy people aren't going to see great performance either when margins and sale volume are lowered by the increases in input costs.

SiliconSplash 2y ago

> Upper income people will be fine with a 10-25% increase in cost of things they purchase. Regular income taxes are progressive. This is assuming you are buying goods that are outside of the country. Most consumption weekly is things like food, drink, disposable items and not things like computer hardware which is refreshed every few years normally. > There is a reason why rich prefer tariffs over a progressive income tax. I am not rich and would prefer Tariffs over income taxes (I am in the UK). I would rather save the that gets taken every month from the taxman and I could afford to buy myself a nicer property. I could also make the conscious decision to make sure I purchase items produced in the UK which presumably for food, drink (at least) I would wager is produced in the UK and thus would be cheaper than things produced outside of the country. As for progressive taxes they actually make it more difficult to earn more money even at a near minimum wage. When I worked at a super store (Tesco) many years ago, If I worked a few hours overtime, I would go over income band for that month and it effectively made working that shift a waste of time. I am including my time to commute which was a 30 minute cycle and not wanting to have to stack onions. So I didn't bother working overtime as a result. Neither did many of my colleges. Granted I normally would get a check back at the end of the year from HMRC as I would have over-payed for the year, but when you are living month to month, I would always prefer the cash in my pocket as the end of the tax year is an eternity away in comparison.

deleted 2y ago
[deleted]
3vidence 2y ago
Here's the fun part if you are not wealthy. You would pay both anyways. It's a rigged game, if anything they would use tariffs to cut the progressive rate not the base tax rate anyways.
hn_throwaway_99 2y ago
> This is assuming you are buying goods that are outside of the country. Most consumption weekly is things like food, drink, disposable items and not things like computer hardware which is refreshed every few years normally. Trying really hard to refrain from a snarky response, because this analysis is 100% incorrect. First, where do you think a substantial portion of food, drink and disposable items in the US comes from? More importantly, though, the entire economic rationale of import tariffs is to allow domestic producers to charge more. It doesn't matter if you just "buy American", because if the competition that American producers face is now 10% more expensive, these producers will raise prices. Or, if more charitably, foreign goods were making American-made products uncompetitive, American producers can now come in and make those goods, but only at the higher prices. Again, the entire point of tariffs (at least from the perspective of "we want to bring production back to this country") is to raise the price of goods across the board so American producers can be competitive. Also, you misunderstand how progressive taxes work. When you make more and go into "the higher income band", you're not taxed more on ALL your income, just the portion that is in the new band (at least in the US). Yes, there have been cases in the US e.g. with welfare where if people made above a certain amount their welfare was cut off, but those have all been highlighted as examples of poor tax policy that have largely been fixed.

yibg 2y ago

It’s an extremely regressive tax policy too. Not only is it a flat rate for everyone regardless of income, the wealthy spend less as a percent of income than the poor, so less of the income is taxed this way in the first place.

threatofrain 2y ago

Why would rich people prefer tariffs? Only very specific rich people who know how a trade war is going to unfold want tariffs.

myrmidon 2y ago
You misunderstand the argument. The population being taxed via tariffs instead of income/capital gains is a net gain for wealthy people always, because they spend a much smaller fraction of their income, and a significant portion of the "tariff-base" is fixed-cost like. Consider an iphone or a washing machine: Basically everyone is gonna pay those tariffs once, it does not matter if you work a construction job or own a whole city block.

rayiner 2y ago

The rich favor free trade. It effectively allows them to outsource production to cheap foreign labor and increase their domestic profits. You’re incorrectly assuming a static system where production doesn’t shift to domestic sources. Yes, tariffs increase prices somewhat for consumers. But they encourage domestic production and domestic jobs. Ask yourself—are Americans better from importing cheap Chinese crap than they were in the 1960s when stuff was made in America?

SiliconSplash 2y ago
I notice in almost all these conversations is that many pretend that things will stay exactly the same forever and people won't follow incentives.
HDThoreaun 2y ago
> are Americans better from importing cheap Chinese crap than they were in the 1960s when stuff was made in America? Absolutely we are
munksbeer 2y ago
How widely do you think this concept applies? Across countries? Across states? Across counties?

hintymad 2y ago

Not to challenge the notion of tax but to seek an answer: what would be a better solution to the deindustrialization of the US then? China has 350X of the shipping building capacity than the US. We couldn't even produce masks fast enough so we had to buy BYD's during the Covid. GM's factory looked like a WII-era run-down workshop compared to BYD's fully-automated factory. DJI took more than 99% of the drone market. Another question how we deal with imbalanced tariffs, like China and Europe could place higher tariff on some products than we do to them.

rayiner 2y ago
It’s just the latest memo that went out to neo-“liberals.” Obviously the rich favor free trade. That’s why American liberals consistently opposed free trade until Clinton’s third way approach.
kibwen 2y ago
> what would be a better solution to the deindustrialization of the US then? Unfortunately, given the geopolitical necessity, the question is moot. The people of the United States, regardless of what they might claim, do not actually want reindustrialization. It's easy enough to prove: are Americans willing to either accept wage decreases in line with non-Americans, or accept price increases that would cover the cost of paying American wages? The answer is definitively "no", and thus reindustrialization cannot happen. (But machines, you say. Those machines work just as well in China as in America, staffed by Chinese techs who will work for less. This solves nothing.) Americans want to eat their cake and have it too, and unfortunately this is not how reality works. But no politician ever got elected by telling the electorate that what they want is incompatible with reality. No, if the electorate wants a pony, you promise them a pony, and then when the pony fails to show up you blame it on... let me check today's notes... woke DEI communist pony salesmen.
- cynicalpeace 2y ago
  > are Americans willing to either accept wage decreases in line with non-Americans, or accept price increases that would cover the cost of paying American wages? The answer is definitively "no", and thus reindustrialization cannot happen. The answer is not "definitively" no. Trump ran on tariffs and definitively won. And I know many people (myself included) who would happily "accept price increases that would cover the cost of paying American wages". Most of these people are low/middle income Trump voters. Trump won the $30k-100k voters a year. Harris won all other income brackets.

stretchwithme 2y ago

What evidence is there that "the rich" like tariffs?

ides_dev 2y ago
One very rich man is pushing hard to implement some.

glimshe 2y ago

In theory, tariffs have the potential to bring back jobs to a highly industrialized nation like the US, benefitting the poor with more and better jobs. Income tax can't do that.

qingcharles 2y ago
Nobody is going to build a manufacturing plant knowing that Trump is only using the tariffs as leverage and they will be rescinded next week. Most of the tariffs he signed in are already gone. And even if they stay during Trump they might get killed in two or four years if the gov shifts sides.
- glimshe 2y ago
  If that's true, the tariffs won't be a tax on the poor either.
  - qingcharles 2y ago
    True. Or at least, only for a short time.

insane_dreamer 2y ago

this is also why states that don't have a sales tax, like Oregon, have a more equitable tax structure

waltercool 2y ago

Progressive taxes are usually one of the worst and attacks the success, it limits poor people to become middle-class earners, or middle class to get wealthy. Taxes are already a certain percent. It doesn't make any sense to tax more or less percent to people over certain amount of money. At the end, poor people dont want to work because they will lose all benefits and get taxed. Middle class people don't want to earn more than certain amount because they will get taxed more. Because progressive taxes are reliant on certain income (value) or wealth, inflation makes people to pay more taxes over time.