This point needs to be hammered home every time the rich (or their "hope to be rich" enablers) talk about what percentage of total revenue they pay. It's almost as if they think a poll tax would be fairest. They pay a higher dollar amount because they have more of what is being taxed, which in turn is largely because of a system that actively drives "rich get richer" disparities. You have to look at the rates not the dollar amounts. Is 46% of revenue on 40% of wealth that unreasonable?
The issue is the 'progressive' nature of the tax code. Everyone could be taxed at the same rate and the 'rich' would still pay the most in tax dollars. The only reason ever given for why the 'rich' should pay a higher tax rate is 'because they can afford to.' Which then leads to tax code legislative loopholes to try to offset the excess taxation and then more resentment when those loopholes are used to shelter income.
Not true. I just gave another reason - to offset the built-in drivers of disparity. Transfers between wealth and income (i.e. labor) always favor the wealth holder. It's the very nature of capital, part of what makes it so great but also with not-so-great consequences that must be compensated for. The problem is not the progressivity of taxation, but the fact that it's primarily on the wrong thing - income and consumption instead of wealth.
I think economists universally agree income tax is suboptimal.
I'm not sure if a wealth tax is the answer.
Personally I'd like to see taxes on negative things. Taxes invariably have the effect of discouraging the thing taxed. Which is why taxing income sucks. Let's tax pollution, traffic congestion, advertisements, and social media. Ok, well the last two are half joking.
I agree, actually. "Tax bads, not goods" as saying goes. However, as a practical matter I don't think a pure Pigovian approach could ever fly. Overhead and enforcement issues would sink it. A hybrid approach with most revenue from land-value and value-added taxes gets pretty close and is fairly straightforward to administer. Not saying we shouldn't tax those other things, but that wouldn't be a huge percentage of revenue.
The most logical thing, then, would be to tax obesity. The obese cost us several trillion dollars because of COVID. (If it weren't for the obese, our hospitals would have had capacity, and there would have been no need for shutdown.)
Yeah land tax and VAT are quite practical possibilities.
I'm still hopeful for a Carbon tax. I think I'd be more likely of seeing that in Saudi Arabia before the USA though with the political climate being what it is.
I'm no "hope to be rich" enabler. I'm a realist who understands that if California drives away all the wealthy people, the economy and business climate will be worse, not better.
You can have your utopia where every man earns the same meager living working in the commune, I choose to live in the real world.
