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by illivah 3871 days ago
what makes 20-30% reasonable? Just don't say "because it feels right".
4 comments

Without any sort of metric which defines what a successful tax policy means then reasonable probably means, "is sufficient to pay for the services the people demand."

Why is a percentage reasonable? Why not a fixed tax? Why have tax brackets at all as opposed to a smooth curve? Why should taxes scale proportional to income and not amount of services consumed or potentially thousands of other variables? Why should a pacifist pay for the military? Why should a pedestrian pay for the roads? Is it fair to use taxes to manipulate the incentives of consumers to they consume more or less of specific products (like corn and tobacco respectively)? Is is ethical to use taxes (or lack thereof) to steal businesses away from other states or countries? Should people who work in certain industries be taxed more or less? How about different tax rates based on age, race, sex, or gender as there's probably data to support different risk factors for different segments of the population. Should people who have been on welfare be taxed more to compensate? Should the tax rate be negative for certain income levels?

I have absolutely no doubt that you can answer all these questions relative to your own personal definition of reasonableness but there's no chance in hell any sufficiently large group will agree on any or all of these.

I totally admit I said 20-30% because that felt right to me. I guess I ought to sit down and look at the stuff governments provide that I appreciate (such as basic police protection and infrastructure) and how much that costs. And I should probably look at all the bad things governments do (unneccesary wars, intrusive nanny state rules etc.) and how much damage that causes.

Of course, there are other things that affect whether a tax rate seems reasonable, too. For example, in a country where the difference between rich and poor is great, it might make sense to tax the rich more than in a country where the difference is small.

I think people don't like how half (or more than half) of their "hard earned" income goes to the government. 20-30% seems more reasonable, because you get to keep most of what you earn.
Think of marginal rates (because the top rates only apply at the higher salary ranges)

Would you like to get a $100 pay raise and get only an effective $20 pay raise? Would you bother working more for that?

People will always have a sense of fairness. And we're not talking about the very rich there (which usually pay a smaller effective rate), we're talking about people with high earnings, but usually not millionaires.

At the hundreds of millions and higher club it's all a form of dick measuring contest anyway, so yes... Those people would do what they do even if the tax rate were 99%.