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by conanbatt 2934 days ago
> think you and I fundamentally disagree on what a tax is. You seem to view it as punishment or a burden. I view it as the method for paying for things that help the collective good. Not a punishment but rather a duty for those with the means. If we aren't using taxes to collectively protect society (e.g. military, police, courts), help the less fortunate, etc then why collect them at all? The richer the entity (individual or business), the more means they have and the more they actually benefit from those taxes even if they have to pay them.

A tax IS a punishment. It is a charge not reciprocated by a service to the person that pays for it. Collective goods dont require individualized sacrifices, just individual collaborations. But okay, we can divert ideologically on that point, but nevertheless any effect of taxation is a cost on the person paying for it, and will have the same effects to him as if the person lost the taxed money into the abyss.

> Just to add, if you agree we need taxation to have functioning society, why wouldn't we get the money from the richest? Why wouldn't we put the burden on the richest? In terms of people inside rich organizations, it is only the already rich, owners and investors, which would feel the burden. Supply and demand will continue to give consumers high quality and low prices. Employees will still get their market-rate wages or minimum wage for low-skill jobs.

I think I've always had a curious thought about the idea of not discriminating minorities, except for the rich, you better discriminate those! If we can agree at least that taxation is the cost of government, why should the cost of government only come from a section of society? A society that achieves to make a part of it responsible for its whole will not thrive in collaboration and cohesiveness. A society where some expect to make a living at the others expense is not a free one.

In economic terms, there are multiple criteria on measuring how good a tax is. There is of course how the burden affects the person itself, but also how efficient it is to levy it, how convenient it is to pay or how predictable it is. Satisfying multiple criteria will not give you much room to tax "the rich".

There are normative arguments as well: just placing a tax on the rich doesnt mean you'll be able to raise that money, as the rich have the highest recourse to escape. Human beings are very hard to corner!

2 comments

> A tax IS a punishment

A tax is a legitimate cost of a functioning economy as much as an electricity bill or a truckload of cement. That tax pays for the infrastructure which makes that same transaction possible in the first place.

Ideally the cost of participation in the economy should scale linearly with how much excess benefit you derive. Total benefit minus the cost of being a functioning human in the society. This requires the insight that a person who has $1,000 of discretionary money every week has a lot more than ten times the excess benefit as someone who has just $100 discretionary every week.

Put another way, from the perspective of a rich person, it's in my interest to have everyone else in society well fed, free of disease, mentally healthy and able to work productively. The best way for rich people to ensure that is to require them all to pay a much larger proportion of taxes.

These are 3 very different arguments. I will answer each:

> A tax is a legitimate cost of a functioning economy as much as an electricity bill or a truckload of cement. That tax pays for the infrastructure which makes that same transaction possible in the first place.

A tax can be used to pay for the infrastructure, and also pay many other things that are terrible and inefficient and immoral. Government spends a very small fraction of its budget on infrastructure, what about the rest? If only a fraction of the spending justifies the whole, then as long as you use some part for good you are entitled to rob the whole.

Moreover, as time progresses, we find more and more ways to pay for infrastructure without taxes. Why is the infrastructure of the US is crumbling, and tax pressure is equal or higher? Its just not real that taxes are necessary for infrastructure, and that taxes are spent on infrastructure.

> Ideally the cost of participation in the economy should scale linearly with how much excess benefit you derive. Total benefit minus the cost of being a functioning human in the society. This requires the insight that a person who has $1,000 of discretionary money every week has a lot more than ten times the excess benefit as someone who has just $100 discretionary every week.

I dont see well the justification for 'excess benefit'. What is excess benefit and who decides? For me, goverment employee salaries are excess benefit, because many of them do actual damange and collect a paycheck. Can we tax those 100%? The second part talks about the ability to pay: if someone has higher ability to pay a tax they should pay a higher tax. I dont think this is in everyones best interest either. If someone is earning a lot more because he produces more value, the tax will punish the productive fields, and prize the least productive fields. This means more people will work on the least productive, and less people on the most productive. The end result is worse wealth for the entire society.

> Put another way, from the perspective of a rich person, it's in my interest to have everyone else in society well fed, free of disease, mentally healthy and able to work productively. The best way for rich people to ensure that is to require them all to pay a much larger proportion of taxes.

It is not true that taxes are the way to help people advance. The greatest advances of human kind in quality of life and wealth happened in time of low government tax and intervention. Equating taxes to benefit is a grave mistake, one that reality has once and again shown extreme dangers. The society with the ultimate taxation, Socialist-communist, has shown greatest decline and misery of its people.

> taxation is a cost on the person paying for it, and will have the same effects to him as if the person lost the taxed money into the abyss.

In my town, in addition to the normal local taxes, there is a special greenery fee/tax that all residents must pay. It is only $25/year. The purpose is to pay the upkeep of all the green spaces which there are many. I happily pay this because I like to walk through these green spaces. Individually there is no way that $25/year would pay for that, but collectively the town can afford to and it improves living here for all the residents.

There are of course many examples where tax money is not used wisely, but there are also many examples where it is. We should get better at spending it wisely which is of course easier said than done. But to say that taxes are like throwing money into the abyss just doesn't stack up to the data.

And while we all would prefer greater efficiency in government, an inefficient government is still universally preferable to an absent or non-functioning government.

Also, if that inefficiency is in the form of salaries or domestic spending, it's only partly wasted as it adds to movement of money in the economy.

God no. The broken window fallacy comes back from 1830, before Bastiat.

If you pay someone to do nothing you waste both the money you used that could have gone to something useful and the time of the person that would have done something else, hopefully productive, instead.

That assumes that a maximally efficient economy is also the maximally desirable. I strongly disagree. (Though if a generous UBI was already in place, I could change my mind...)
No, it just debunks that the idea of burning peoples time is a benefit for society.
If you are happy to pay for it, why do you need it to be a tax? You can pay your government directly.

Unless you want other people to pay for it, of course.

That is what a tax is and how it is levied. The people in the town agreed via voting to levy the tax so that we could all collectively benefit. I am sure some people disagreed but that is democracy.
Do people that vote against it not get to pay for it?

Democracy is not a justification for payment. 51% can vote to rob the other 49%.

Democracy is a justification actually. That is the point of the system. If you want a different one, good luck but so far no one has been able to beat democracy. Personally sometimes I get what I want and sometimes I don't. Democracy is a compromise.
You are conflating the validity of a political process with the validity of an economic process. Saying that 51% can rob 49% and that is fine both in justice or economic terms means that you have no capacity to argue against anything but the number of votes. IT truly destroys your position to say that the only right thing is the result of a poll.

But lets say I go down this path with you, one that is not only not how democracies work, but a reprehensible if it were. Lets put it up to a poll then. Lets vote for all these issues and see what happens. The results might surprise you. I have seldom if ever seen a vote for a tax increase to pass popular support.