Why "progressive" tax schemes are evil

From: Jeff Bone (jbone@jump.net)
Date: Mon Mar 19 2001 - 08:42:52 PST

> The moral argument that those who benefit disproportionatley from the
> political economy of our fair land should, in turn, pay for that benefit is
> pretty much undisputed except by those whose ONLY reading is Ayn Rand.

Thanks for the party line, now here's what's wrong with it.

It assumes that "the rich" benefit disproportionatley [sic] from the political
economy of our fair land. (We'll leave the implication --- that the rich are so
primarily due to this disproportional benefit --- alone.)

So let's look at that.

Do the rich benefit more from the interstate highway system? Individually,
certainly not. Most folks with money drive *far* less --- and certainly drive
less when travelling between states --- than lower-income folks. It's pretty
easy to claim that everybody *individually* benefits equally from the interstate
system, so shouldn't everybody pay --- not even the same rate --- rather the
same damn *amount?* Well, that just wouldn't do, would it? Boo hoo the working
class, again.

But, you say, the rich *do* benefit from the interstate system
disproportionately --- their wealth is created by corporations which use the
system for trucking, etc. Yes, but those corporation *themselves* already pay
tax on the benefit they derive, through all sorts of tax vehicles. What's left
over is --- *should* be --- related directly to *profits,* i.e. "the fruits of
industry." Where exactly *do* you want to hang the "price tag" of
disproportional benefit, on the individual or the corporation? In a fair
system, you'd get to pick only one. Instead, our existing system, citing the
*same* reason, hangs the pricetag in multiple places.

Let's move on. Surely the rich benefit more from education than the poor?
Well, no. The rich are much more likely to go through life without ever seeing
the inside of any public school. They go to private grade schools, private high
schools, private prep schools, private universities. Yet they still pay public
school taxes. But of course, you say, because they want to employ educated
people! Well, now, I won't dispute the desirability of that; they *do* get
benefit out of that. But (a) we have the multiple price tag problem again, and
(b) who *really* benefits more in that case, the person who received the
education, thereby making them economically competitive and *able* to have the
job in question, or the employer?

Moving on. Well, of course the rich benefit more from having a strong military
to defend their assets and interests. The problem is, in making such an
argument, you are espousing one of two odious opinions, either: that it is
correct and proper to engage in offensive military adventurism on behalf of
corporate interests, or; a very anti-human view that the value of a human life,
liberty, and political freedom is proportional to individual wealth. I'm
opposed to the former; I would agree that the rich benefit more from having,
for instance, the US protect Kuwait from Iraq. But I don't think we should be
in that business, as a country... OTOH, if you view the purpose of the military
as being largely defensive, then how can you possibly claim that a wealthy
individual's freedom, liberty, etc. is worth more than a poor person's? If it
*is* worth more, again, it is only so due to the industry and hard work of the
former, and they should be allowed the fruits of that industry.

Do the rich benefit disproportionally from our political economy? Hell no. Let
me tell you the dark secret that the progressivists don't like to admit: the
people who benefit disproportionally from our regressive political economy are
the Joe Sixpacks! Any progressive system rewards mediocrity and laziness. Our
system *penalizes* hard work, by making those who generate more income pay
*more* of it as a percentage in taxes! While Joe Sixpack is out on the lake on
Memorial Day drinking his 18th beer, Joseph P. Warbucks Esq. is pouring over his
backlog of IPO prospectii that he hasn't had a chance to look at lately because
he's been working 14 hours a day. Who gets taxed more? When Joe Sixpack goes
to the store and buys a bunch of asparagus, he doesn't consider that it's J.P.
Warbucks' risk capital that: built the store, contracted the farmers,
contracted the shipping, and got that asparagus from Salinas, CA to the store.
Who gets taxed more? When Joe Sixpack gets digital cable in order to feed his
8-hour-a-day couch potato habit, he doesn't consider the $billions at risk that
J.P Warbucks put in just to facilitate this. Who gets taxed more?!? And by
more, I don't just mean *dollars* more --- I mean *percentage* more. Laziness
is rewarded! It's institutionalized, ENCOURAGED by the system itself!

Capital investment by "those who have" is what drives our society. I can't
*BELIEVE* the unmitigated gall exhibited by "those who have not" when they
suggest that "those who have" should not benefit proportionally from the risks
they take, the sacrifices they make, and the hard work they put in to creating
their own wealth!

Progressivism is the lingering ghost of our earlier, global flirtation with
socialism in the last century. It's time to change it. The result of moving to
a fair, proportional tax system based on consumption with universal single rate
would result *both* in lower taxes for those who earn (and therefore spend)
less, *and* the creation of an ocean of available risk / investment capital of
overwhelming proportions. And *that* would benefit society as a whole more than
any other single economic policy the gov't could enact.

Didn't like my earlier Jefferson quote? Here's a quote from Alex Hamilton,
advocating a consumption tax:

     There is no method of steering clear of this inconvenience, but by
     authorizing the national government to raise its own revenues in its
     own way. Imposts, excises, and, in general, all duties upon articles
     of consumption, may be compared to a fluid, which will, in time, find
     its level with the means of paying them. The amount to be contributed
     by each citizen will in a degree be at his own option, and can be
     regulated by an attention to his resources. The rich may be
     extravagant, the poor can be frugal; and private oppression may always
     be avoided by a judicious selection of objects proper for such
     impositions. If inequalities should arise in some States from duties
     on particular objects, these will, in all probability, be
     counterbalanced by proportional inequalities in other States, from the
     duties on other objects. In the course of time and things, an
     equilibrium, as far as it is attainable in so complicated a subject,
     will be established everywhere. Or, if inequalities should still
     exist, they would neither be so great in their degree, so uniform in
     their operation, nor so odious in their appearance, as those which
     would necessarily spring from quotas, upon any scale that can possibly
     be devised.


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