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by dragonwriter 2800 days ago
> Any tax decrease "disproportionately" benefits the wealthy because they have more.

Untrue; consider, e.g., the adoption of EITC if it didn't already exist. It's a pre tax decrease, but wouldn't benefit the wealthy (in first order effects) at all.

Or abolishing payroll tax and transferring equivalent amounts into the various trust funds out of general revenue, a pre tax decrease that would slightly benefit the wealthy (because Medicare tax), but disproportionately benefit those whose income was primarily from labor, which isn't the wealthy.

2 comments

Or more simply, a reduction in the amount paid in the first few tax brackets. That is a tax decrease that would benefit everyone but proportionally benefit more those to whom the upper tax margins are irrelevant.
So complicate the tax issue which increases costs elsewhere and contribute to government managed funds that prove inept? Taking funds from a farmer growing crops successfully and giving them to the one nextdoor who still hasn't been able to get a seed to sprout is a textbook definition of idiocy, not to mention theft.

None of that changes the fact that tax breaks will be greater in absolute numbers for wealthier individuals than for those earning less. Play games to fudge numbers so all is not equal as much as you want - those with resources avoid participating in socialistic wealth redistribution.

No income tax is far simpler. Do you know what the cost for enforcement of individual income tax is? Hint: think astronomical.

Go after about 140 million individuals vs working with approximately 28 million businesses? Do you think business or individuals are more professional? Who had the bright idea to create such a logistical nightmare?

You can keep working with an insane system if you want but people with resources do what people without resources would eventually do in the face of direct taxation, whether financially or physically - leave.

> No income tax is far simpler. Do you know what the cost for enforcement of individual income tax is? Hint: think astronomical.

I do know what the cost of enforcement of individual income tax is, at least in a sane system with effective witholding and most people not submitting stupid tax returns every year: about 1.25% of money raised (https://publications.parliament.uk/pa/cm201012/cmselect/cmtr..., table 7).

And the simpler you make the system the cheaper it is (this is NOT flat rates - calculating graduated taxes on income is basically free) - you can see this from the "National Insurance Contributions" line on the same table, which is an effectively zero-complexity additional income tax which costs a third of a percentage point of money raised.

So not astronomical. Really quite efficient.

They're actually getting even better at it - 1.12% in 2009-10!

I like how you've pointed out the amount relative how much theft^H^H^H^H^H "tax" revenue is brought in rather than the absolute amount of:

£3,673,797,000

That's pretty astronomical to me. I'm sure you'll find other ways to break it down and try to refute but it still doesn't change the waste of time taxation incurs.

My stance will not change from the perspective that income tax is more destructive to low-income earners than it is to the wealthy, and that it drives away wealth.

Let's just settle this as "we won't agree" since I have more productive things to spend my time on than arguing over what shouldn't exist in the first place. Pray for Brexit or go down with socialist Europe.