| >> Everyone is equal in terms of the percentage of product consumers must pay in taxes, for their product. > For a person making minimum wage, each dollar is worth significantly more to that person than someone making 6 figures a year. I believe you're referring to "Marginal Propensity to Consume". But MPC is evaluated with respect to dollar-amounts, not percentages like you imply. A dollar bill is tangible, but a percentage is a ratio, which is abstract. So I feel like you're comparing apples to oranges. I.e. a "flat tax" vs a "flat tax rate". Under a flat tax rate, minimum wage earners are more sensitive to dollar changes, but also pay less total dollars. Does the former compensate for the latter? Moot. But let's not forget that a flat tax rate would simplify the tax code and more conspicuously expose loopholes. Elegance and simplicity are often unnecessary and quixotic. But in this case, I think it's actually the progressive tax rate schemes which are unnecessary and quixotic. According to the U.S. Constitution, the purpose of a tax is to enable the U.S. Government to raise the funds necessary to continue operating, not to redistribute wealth. A flat tax rate and a progressive tax rate can accomplish this same goal, but a progressive tax rate is so needlessly arbitrary. Inevitably, a progressive tax rate graph looks more like an S-curve than a J-curve. This is due to the asymptote which arises because the domain is [0, inf) while the range is [0%, 100%]. If you're worried about the ethics of inequality, I think this is more aptly dealt with via tax returns and subsidies. I like to think of this as separating the core from the features. |