Obviously, a flat tax based on a percentage of income is already a progressive tax. Assuming a 10% flat tax, the Trumps making 30 million a year are paying 1,000 times the amount in taxes as the Browns making $30,000. However, this is still insufficiently progressive and makes me think about a passage from the Bible.
38 As he taught, Jesus said, “Watch out for the teachers of the law. They like to walk around in flowing robes and be greeted with respect in the marketplaces, 39 and have the most important seats in the synagogues and the places of honor at banquets. 40 They devour widows’ houses (emphasis added) and for a show make lengthy prayers. These men will be punished most severely.”
41 Jesus sat down opposite the place where the offerings were put and watched the crowd putting their money into the temple treasury. Many rich people threw in large amounts. 42 But a poor widow came and put in two very small copper coins, worth only a few cents.
43 Calling his disciples to him, Jesus said, “Truly I tell you, this poor widow has put more into the treasury than all the others.44 They all gave out of their wealth; but she, out of her poverty, put in everything—all she had to live on.” (Mark 12:38-44, NIV)
What I take from this example is that the cent we might tax from the widow is worth more to her than $1,000 from the Browns, which is worth more to them than $10 million from the Trumps. If we tax the widow, she starves. If we tax the Browns making $30,000 a year very much at all, it makes it entirely likely that the daughter cannot take piano lessons, the son cannot go to college, they cannot afford to have a vacation that year, and perhaps the father cannot start a business. For the Trumps at $30 million a year, even taxing them at a rate of %90 would not threaten their ability enjoy any of these opportunities, and they certainly would not starve. They would still have $3 million a year; dad can start a business, son can attend the ivy league, and the daughter can take lessons from Vladimir Ashkenazy if they want.
I am also reminded of this dynamic as I live in Sri Lanka. For example, a typical taxi fare in a Tuk Tuk is 50 rupees per kilometer, which is the same as $0.62 per mile. A 15 minute trip can cost $1 and people can haggle for 10 minutes over 25 cents. Clearly, not all 25 cents are equal. It depends on where it comes from.
In the Great Leap Forward, Mao Tse Tung quite famously required his people to fill quotas for mining iron, with the result that many peasants simply had to bring in their pots, pans, and plows to be melted down. Obviously, this is an extreme example, but the point remains: if our tax policy and economic system threatens the Browns’ opportunity for education, advancement, of building up savings, of pursuing dreams, we will certainly have more iron ore, but at great expense.
The deficit does not care who pays it—a dollar from the Browns is no better than from the Trumps. Perhaps we should consider, among other important considerations, using the least costly money whenever possible.
August 29th, 2012 at 7:23 PM
Love this post! Great analogy! We so enjoy your perspectives on history and current events. We read all of them, but because we’re on the road and underway so much, we are usually unable to comment. Just know we’re there–lurking and usually reading your posts on a backroad from our iPhone or on a McDonald’s hotspot somewhere:) Looking forward with interest to hearing about your grad work next year. Keep up the good work and please say “hello” to Alicia for us. Susan and Alan
August 29th, 2012 at 9:12 PM
Thanks! It makes me so happy to hear that you are enjoying some of these ideas. You’ve made my day! Happy travels!
August 29th, 2012 at 8:32 AM
I agree too. But, in the spirit of fairness and positive psych, lets take a moment and reflect. I look at everything in my life that means anything to me: my iphone, digital timex gold stretch band watch and a picture of my mom and dad which is currently blocking the view of my XBox, I can’t help but think: thank you One Percent; you’ve brought me the only things strangers have ever coveted about my life.
Rockefeller may have been the richest person ever in North America but between Skype, cell phones, cheep airfare and a 97 Jeep Grand Cherokee I wouldn’t trade lives with him – and that is all thanks to 1%ers.
Any object that you like because of it’s intrinsic awesomeness, and not because it was hand crafted in love by an autistic AIDs orphan or family member – there’s a rich person that made that thing possible.
But go ahead, I agree, tax em. We have a ridiculous tax code and if enough rich people get pissed off at it perhaps we’ll finally get it reformed.
But lets not forget, the one percent have made life pretty fricking awesome for us 99.
So before you go to bed at night, when you’re spending 20 minutes recounting everything you’re thankful for, don’t forget the biggest blessing off all- The One Percent.
oh, and our cooperate tax rate is too, I’d cut that in half in a heart beat.
August 29th, 2012 at 9:11 PM
Lose corporate taxes entirely. they are absurd (this is a spot where I think Democrats are idiots).
Dude — taxing the 1% has absolutely nothing to do with my hating them, or being thankful to them. Also, even if your exceedingly dubious causal chain is correct (which it isn’t! Carnegie knew very little about steel, but he was a good manager. Jobs was a businessman who relied on Wozniak and others for computer genius (probably also in the 1% though), fucking edison invented a shit-ton yet rockefeller was 900x richer (I made up that stat)), the 99% pick all of the 1%’s vegtables, cook their food, grow their food, build their houses, fix their plumbing, cut their hair, make their clothes, build their cars, fight their wars, and even manufacture their iPhones and manage the supply chains to keep them cheap.
So are we dependent on the 1%? Yes. Absolutely they have a critical role to play in society. But it goes both ways, and I would argue that they are even more dependent, way more dependent in fact, on us.
Finally, most of the 1% are not there because of brilliance, but because of privilege: their parents were rich, they went to ivy league schools, got good jobs, inherited wealth, etc. How I wish the 1% were all Steve Jobs.
September 1st, 2012 at 2:55 AM
Look, I’m sure we actually agree on most of this, if not all.
First off, (just to be snarky) Tesla would have been a better anecdotal argument, and secondly, yes, before you GAAOM,(Go All Alicia On Me [yes Alicia, that is a thing people say now.]} yes, governments have done a lot of good, and so have public universities, yadda, yadda, and all that jazz.
“They are more dependent on us!”
You classless trollop! Classless. A harlot in denim capris.
What you are saying, Jeremy, is this: “Isn’t really amazing that people do jobs! Participation trophies for everyone!”
Your proletarian hogwash makes me sick, sir! You make me want to sip brandy from a snifter, grimace over a map of the subcontinent and besmirch that nettlesome Gandhi, or claim an archipelago.
You remind me of a quote by Chris Rock: (which I will tweak for appropriateness and context) “People always want to take credit for things they’re suppose to do. ‘I raise my kids.’ or, ‘I have a job.’ You’re suppose to you dumb motherf(*&#!”
Vegetable pickers, food cookers, growers and hair cutters have been around for thousands of years. Most of the reason why most of the bottom 10% in America are now better off then the majority of the top 10% of Americans 100 years ago is because of the 1% (and appropriate regulations). Insects did not magically decide to mostly live outside. Infant mortality rates did not drop because of auto workers, or baristas, or plumbers: these people did not invent M&Ms or Wheat-Thins, nor are they truly responsible for bring me any of my modern conveniences. And scientists and inventors are great, but their inventions are worthless to me if they can’t figure out a way to bring it to me and sell it at a reasonable price.
Edison inventing the light bulb: interesting.
GE putting in my house: baller.
Obviously there is a lot more to life then material things. However, for the things I do have- I am grateful and happy with them. And what thankfulness I do dispose in the direction of this guilty sod: it is the 1% that get the largest slices of my praise. Whether through luck, providence or greed it is the 1% who pull more then their fair share of changing our world into a better place.
It’s like a human body: All parts play a part, but I play with some parts more then others, which arouses my appreciation and gratitude.
August 28th, 2012 at 7:08 PM
I have never agreed with the whole line about how taxing the rich is “punishing success.” How many people would exchange their empty bank accounts and 20% tax rate for million dollar bank accounts and a 40% rate. I would gladly take some of that punishment.
August 29th, 2012 at 2:11 AM
August 29th, 2012 at 8:54 PM
Agreed. Also, it is strange that success here is defined entirely by money. A brilliant, once in a generation teacher has no hope of “success,” compared to a mediocre investment banker or venture capitalist, but the teacher is likely more salubrious for the health of the society! Good thoughts Palmer.
August 28th, 2012 at 1:38 PM
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