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Thursday, May 11, 2006
What's wrong with the rich getting HUGE tax breaks?
No one's ever accused me of being a conservative, but I occasionally wonder about something:
Why is it "fair" for the wealthy to pay a disproportionate amount of taxes, but it's not fair for them to get huge (disproportionate) tax breaks?
re: From each according to ability, to each according to need. Sound familiar?
I'm afraid not. I dunno if you're agreeing or disagreeing.
For that matter, I didn't take much more than an implicit position, myself. For the record, I think that, if we're going to MAKE the rich give up an even greater portion of their income to taxation, then they oughta get breaks once in a while - just like we enjoy once in a while.
The fact that they don't apply to everybody isn't reason enough to deny them.
I got this quite a long time ago, but it's still relevant
Suppose that every day, 10 men go out for dinner. The bill for all 10 comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh $7. The eighth $12. The ninth $18. The tenth man (the richest) would pay $59. So, that's what they decided to do.
The 10 men ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So, now dinner for the 10 only cost $80. The group still wanted to pay their bill the way we pay our taxes. So, the first four men were unaffected. They would still eat for free. But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fair share?" The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, the fifth man and the sixth man would each end up being "paid" to eat their meal.
The restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so: The fifth man, like the first four, now paid $5 instead of $7 (28 percent savings). The eighth now paid $9 instead of $12 (25 percent savings). The ninth now paid $14 instead of $18 (22 percent savings). The 10th now paid $49 instead of $59 (16 percent savings). Each of the six was better off than before, And the first four continued to eat for free.
But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the 10th man, "but he got 10 times more than me!"
"That's true!" shouted the seventh man. "Why should he get $10 back when I got only $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the 10th and beat him up. The next night the 10th man didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill.
personally i think the rich should have to pay more taxes than normal people. im on disability right now and i dont have to pay taxes. but if i was rich i would feel a certain obligation to support the less privaleged and to also help the government and local programs its only fair really i mean seriously why should rich people get any tax breaks ? who else is gonna support the less privaleged in this world? i cant think of a concrete arguement against this.
Basically (and I'm oversimplifying), it says that dollars on top of a veyr large pile (the rich person's) have less "utility" (use value) than dollars in a smaller pile (a non-rich person's).
Thus, first, taking more from the large pile causes less of an actual burden to anyone than taking similar amounts from smaller piles.
And second, redistributing those dollars into smaller piles increases the net amount of "utility" in the sysem, meaning more productive economic activity for *everyone*.
re: "personally i think the rich should have to pay more taxes than normal people. im on disability right now and i dont have to pay taxes. but if i was rich i would feel a certain obligation to support the less privaleged and to also help the government and local programs its only fair really i mean seriously why should rich people get any tax breaks ? who else is gonna support the less privaleged in this world? i cant think of a concrete arguement against this."
Everyone could.
Every person from the middle and lower classes doesn't need every single tax break they receive, so need shouldn't be the only determining factor for the rich, either, imo.
Basically (and I'm oversimplifying), it says that dollars on top of a veyr large pile (the rich person's) have less "utility" (use value) than dollars in a smaller pile (a non-rich person's).
Thus, first, taking more from the large pile causes less of an actual burden to anyone than taking similar amounts from smaller piles.
And second, redistributing those dollars into smaller piles increases the net amount of "utility" in the sysem, meaning more productive economic activity for *everyone*."
Sounds like Dr. Robin Hood's economic theory. For all it's valid points, it still attempts to justify taking a greater portion of rich people's pies.
A flat tax would still acknowledge your points, but it wouldn't require that the rich pay a greater percentage than the poor and middle-class.
8 comments:
re: From each according to ability, to each according to need. Sound familiar?
I'm afraid not.
I dunno if you're agreeing or disagreeing.
For that matter, I didn't take much more than an implicit position, myself. For the record, I think that, if we're going to MAKE the rich give up an even greater portion of their income to taxation, then they oughta get breaks once in a while - just like we enjoy once in a while.
The fact that they don't apply to everybody isn't reason enough to deny them.
I got this quite a long time ago, but it's still relevant
Suppose that every day, 10 men go out for dinner. The bill for all 10 comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh $7. The eighth $12. The ninth $18. The tenth man (the richest) would pay $59. So, that's what they decided to do.
The 10 men ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So, now dinner for the 10 only cost $80. The group still wanted to pay their bill the way we pay our taxes. So, the first four men were unaffected. They would still eat for free. But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fair share?" The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, the fifth man and the sixth man would each end up being "paid" to eat their meal.
The restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so: The fifth man, like the first four, now paid $5 instead of $7 (28 percent savings). The eighth now paid $9 instead of $12 (25 percent savings). The ninth now paid $14 instead of $18 (22 percent savings). The 10th now paid $49 instead of $59 (16 percent savings). Each of the six was better off than before, And the first four continued to eat for free.
But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the 10th man, "but he got 10 times more than me!"
"That's true!" shouted the seventh man. "Why should he get $10 back when I got only $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the 10th and beat him up. The next night the 10th man didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill.
Thanks for sharing that domenick.
FYI, domenick, I shared that in another online discussion I'm having about this topic.
So, thanks, again.
personally i think the rich should have to pay more taxes than normal people.
im on disability right now and i dont have to pay taxes.
but if i was rich i would feel a certain obligation to support the less privaleged and to also help the government and local programs its only fair really i mean seriously why should rich people get any tax breaks ?
who else is gonna support the less privaleged in this world? i cant think of a concrete arguement against this.
Marginal utility theory.
It's a staple of neoclassical economics.
Basically (and I'm oversimplifying), it says that dollars on top of a veyr large pile (the rich person's) have less "utility" (use value) than dollars in a smaller pile (a non-rich person's).
Thus, first, taking more from the large pile causes less of an actual burden to anyone than taking similar amounts from smaller piles.
And second, redistributing those dollars into smaller piles increases the net amount of "utility" in the sysem, meaning more productive economic activity for *everyone*.
re: "personally i think the rich should have to pay more taxes than normal people.
im on disability right now and i dont have to pay taxes.
but if i was rich i would feel a certain obligation to support the less privaleged and to also help the government and local programs its only fair really i mean seriously why should rich people get any tax breaks ?
who else is gonna support the less privaleged in this world? i cant think of a concrete arguement against this."
Everyone could.
Every person from the middle and lower classes doesn't need every single tax break they receive, so need shouldn't be the only determining factor for the rich, either, imo.
I appreciate the feedback. My thoughts...
re: "Marginal utility theory.
It's a staple of neoclassical economics.
Basically (and I'm oversimplifying), it says that dollars on top of a veyr large pile (the rich person's) have less "utility" (use value) than dollars in a smaller pile (a non-rich person's).
Thus, first, taking more from the large pile causes less of an actual burden to anyone than taking similar amounts from smaller piles.
And second, redistributing those dollars into smaller piles increases the net amount of "utility" in the sysem, meaning more productive economic activity for *everyone*."
Sounds like Dr. Robin Hood's economic theory. For all it's valid points, it still attempts to justify taking a greater portion of rich people's pies.
A flat tax would still acknowledge your points, but it wouldn't require that the rich pay a greater percentage than the poor and middle-class.
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