[bryanlarsen]

The standard mechanism for turning ensuring a flat tax into a progressive tax is to spend the proceeds of the tax a way that benefits people equally.

For example a VAT is regressive, but is usually accompanied by a rebate that sends a cheque to everybody for an amount that a typical poor person would spend on VAT. The congestion charge goes to the MTA, which benefits everybody.

For your example, where are the proceeds spent? If the charges are spent to improve everybody's garbage service, the rich people paying the surcharge are paying to improve the service for everybody; the rich are subsidizing the poor.

[lolinder]

> turning ensuring a flat tax into a progressive tax is to spend the proceeds of the tax a way that benefits people equally.

How does the math on this work? If a regressive tax affects poor people disproportionately over rich people and you then turn around and spend the proceeds on something that benefits everyone equally, you've just done wealth redistribution from poor to rich, no?

In order to counterbalance the effect of a regressive tax you would need to spend the proceeds on something that benefits poor people more than rich people so the disproportionate negative impact is balanced by a disproportionate positive impact.

Arguably paying for the MTA may count as doing that, given that poorer folks are more likely to be using it than rich folks (especially now post-congestion tax). The congestion tax becomes a tax on what is now a luxury (driving a car in Manhattan) that is used to pay for a staple (public transit).

[bryanlarsen]

Rich people pay more on flat taxes than poor people do. For the VAT, they buy more stuff. For the OP's example, they pay for a higher class of garbage disposal. For the congestion charge, they pay it more often.

But they're still regressive taxes. Poor people spend a higher percentage of their income on stuff than rich people do. It's less in absolute terms, but more in relative terms.

[lolinder]

In the cases we're discussing rich people pay more for increased access, so they're still exchanging money for something of value, not just paying more into the system for the sake of it. They get opportunities and benefits out of the toll/fee system that are not available to people who cannot afford to pay.

If the taxes earned from these transactions are then spent on things that also benefit the wealthy just as much as they do the poor, then the rich are double-dipping and poor people still end up net behind the wealthy. They lose access to something that previously was paid for out of property taxes in exchange for more revenue funding services that the wealthy are just as likely to use.

This model at least doesn't further exacerbate the regressiveness of the tax by only funding things used by the rich, but it doesn't restore balance.

That's why I say that the only way that you flip the tax to be progressive is if the proceeds benefit the poor disproportionately rather than benefiting everyone equally.