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by peanut_merchant 1143 days ago
Now reframe the above, normalising as a portion of wealth.

Tax analysed in absolute dollar terms is misleading. What should be analysed is the tax's effect on a person's quality of life. A person with a million dollar income paying 50% tax still has 500k to burn. A person paying 30% at 50k a year has 35k left. That 30% means a lot more at the lower end, even though the dollar amount pales in comparison.

2 comments

> normalising as a portion of wealth.

I don't follow this framing. You are saying we should look at taxes as "how much money does the government allow someone to have"?

This seems to assume a government has a right to take an arbitrary amount of money from its citizens. Do you believe this?

Where in the world would that not be the case?
If you mean practically speaking, everywhere? At some point production incentives are eliminated, leading to quality of life reduction and inevitably revolt or external invasion. Additionally, as government controls a more significant percentage of buying decisions, we shift closer along the spectrum to a command economy which at some point is computationally infeasible, though perhaps ChatGPT will make command economies work finally (mostly kidding).
Do we tax the rich?
Sure we do. Then they hire tax lawyers and use tax havens and end up paying next to nothing.

They also don't get audited.

Do the rich pay taxes? No.

See: rich people asking to be taxed more before 'something bad' happens.

The top 1% of rich people pay 39% of income taxes.

Do rich pay taxes? Yes.