Saturday, November 10, 2012

Why I'm opposed to a "Progressive" income tax.


I'd like to share why I'm opposed to raising taxes on those who make more than I do.  In fact, I'm opposed to the graduated tax rates all together for this same reason.  On three separate occasions I've been rewarded by my employer with a raise only to have my take-home income reduced.  How?  I was just close enough to the top of my tax bracket that a very modest raise, a dollar or two an hour, bumped me into the next tax bracket where my tax rate increased by a greater percentage than my income.  Think about that.  Most people don't have the brutal intensity and drive I have.  That's not an admonishment.  In many ways they're lucky.  What that means, however, is that when confronted with punishment in this form (and I understand it's not necessarily intended as punishment) they give up and stagnate.  I'm not opposed to taxation, per se.  I'm opposed to punitive taxation, which is what a "progressive" tax rate amounts to.

I'd love to see a flat tax with zero exceptions, exemptions, or deductions.  I'd prefer we replace the income tax with a sales tax applied only to new goods.  Doing so would allow those with lower income, or who simply don't value "newness" to reduce their tax burden by purchasing used goods while still ensuring that those who make lots of money pay lots of taxes.  Let's face, not many rich people buy used luxury yachts or used limousines.  Another advantage of such a system would be an increase in re-use and recycling.  Because the effective cost of used goods would be so much lower (due to their being un-taxed) people will be much more likely to buy used, and maintain what they've bought.  To that end, over time, goods will once again be made more robust and easier to maintain because durability will return to the purchase decision matrix.

I want taxes to be fair.  I don't want to worry about whether a small raise, which may be a big deal for a small business, will effectively reduce my income.  I don't want anyone else to have to worry about that either.  I want our taxes to be based not on the static model that leads politicians to argue about who should be taxed more heavily, but on the growth model that, with a few minor exceptions, has characterized the whole of human history since the dawn of the bronze age.

Thoughts?

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