Chapter 12 Reflections

Chapter twelve: The Design of the Tax System.

Which tax system do I prefer?
(Disclaimer to all who read: you will probably disagree!)
I fancy the proportional tax, or at the very most, a progressive tax with very slight increases in brackets (much smaller than they are now).
My reasoning: I believe that it's equitable. Okay, and maybe there's just a touch of rebellion in there - I don't think the government should be allowed to make anyone pay more than anyone else based on any circumstances!
I have a few reasons I think this is the appropriate system relating to the deficit and small businesses, but for this post I'm going to focus on equity.
Now when it comes to equity, the norm in economic conversation is usually the opposite with arguments that progressive tax is the essence of equity. And while I get where that argument comes from (everyone should be giving up an equal "slice of their pie"), I disagree. The same share should be taken from the rich and the poor. Why should our government take more in taxes from someone just because they make more money? They shouldn't. Just like they shouldn't take more in taxes from people who make less money, or have blonde hair, or own a hot tub. But seriously, where is the equity in that?
I think many of us Americans are too quick to throw around phrases like "They've got a ton of money, they can afford it" and "Increase taxes for the rich, they probably won't even notice while they're drinking that $80,000 bottle of wine" or "We're in a recession and our government has a budget deficit, the rich can afford to help."
And to that I say, where do any of us get off thinking we are owed anything by anyone else just because they are "rich"? But I've got a whole rant for that topic so I'll spare you...
So yes, I believe that equity is not discriminating, and not having a higher tax bracket for anyone - rich or poor.
J.R. McCullough, a Scottish economist stated: "The moment you abandon...the cardinal principle of exacting from all individuals the same proportion of their income or their property, you are at sea without rudder or compass, and there is no amount of injustice or folly you may not commit."

That's all for now...
Ciao!