Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktThis morning I’m avoiding mycarefully constructed to-do list by reading TheEconomist, or at least parts of it.
There’s a bad joke abouteconomists in which one of their lot is theorizing how to open a can of tunafish in the middle of nowhere that ends with the line, “Assume we have a canopener.” And although the joke isdecades old, economists still fall into the trap of assuming stuff that’s nearimpossible to manifest as they attempt to share the ‘wisdom’ of theirprofession.
(Full confession: I was apsychology and economics major in college and worked in an economics think tankfor two years as I pondered whether my graduate degree would be in business oreconomics. I went with the MBA, largelyon the basis of a larger expected income flow, but also because I found my workenvironment just too dizzyingly surreal.)
Anyway,back to The Economist. Here’s Exhibit A, a piece about fracking.
“It doesappear that fracking can cause earthquakes. But so can geothermal energyproduction and other parts of the oil and gas production process. Whereverfluids are injected into deep wells, that is a risk. It warrants strict regulation and further study. It is not,however, a reason to shut down a promising industry.”
…
“[T]he industry’s promiseshould not obscure its dangers, especially when it comes to the fuel itprovides…The only way of ensuring thatdoes not happen is to price fossil fuels to cover the cost of the environmentaldamage they do.” [emphasisadded]
Huh?
Strictregulation? Environmental-damage basedenergy pricing? On what planet does TheEconomist assume these will occur?
Exhibit B, in myview, is this article on the euro.
“If the ECB is tofulfil its mandate of price stability, it must prevent prices falling.”
Except that sovereigndebt prices are already falling and there’s little the European Central Bankcan do about it. And no amount of ECB actionis going to rid Europe of that load of debt.
The articlesort of acknowledges this a bit later and then proposes:
“It also meanscreating a [euro] debt instrument that investors can believe in. And thatrequires a political bargain” that would essentially require stronger Eurozonecountries to support weaker ones for the next 20-30 years.
And the strongerEurozone countries will sell this to their people how, exactly? Despite the common currency, the Eurozone isstill a collection of sovereign nations, each with its unique internal makeupand external position in the ‘zone. I’msure The Economist knows this, but itseems to have been forgotten here.
(As a final aside, Isee the world pointing fingers at the US in general and the supercommittee inparticular for failing to address the country’s debt problems. But the ‘zone reportedly on the brink ofdisaster and it hasn’t figured a way out, either.)
And on that note, Imust leave the world of economics where anything can be assumed and get back tothe less nuanced reality of my to-do list.
Filed under: Uncategorized |
All Things in Moderation 
Nothing to add on the economics piece, but this article from Steve Pearlstein today in the Washington Post was a good summation of the various arguments on the "Buffet Rule".On billionaires, secretaries and taxes
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jnc:From your link:This would make the tax code fairer, simpler and more progressive.The tax code can either be fairer, or more progressive. It cannot be both.
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The tax code can either be fairer, or more progressive. It cannot be both. November 27, 2011 12:47 PMWith all due respect, you are expressing an opinion, not fact, with which all would not agree.
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okie:By what standard of justice could a progressive income tax be deemed "fair"?
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By what standard of justice could a progressive income tax be deemed "fair"?I can conjure up a few.Justice is is punishment of success.Justice is equal distribution of wealth.Justice is unequal treatment according to income or wealth.From each according to his ability to each according to his need. But those probably are not the standards that advocates would invoke. ; )
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Income should correspond to effort?
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BTW, why should the tax system be "fair", assuming we could even agree on a definition?
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The tax system can't be 'fair' for that exact reason, Kevin. The word means different things to different people.
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Etymology of "fair":fair (adj.) O.E. fæger "beautiful, lovely, pleasant," from P.Gmc. *fagraz (cf. O.S.fagar, O.N. fagr, O.H.G. fagar "beautiful," Goth. fagrs "fit"), perhaps from PIE *pek- "to make pretty" (cf. Lith. puošiu "I decorate"). The meaning in reference to weather (c.1200) preserves the original sense (opposed to foul). Sense of "light-complexioned" (1550s) reflects tastes in beauty; sense of "free from bias" (mid-14c.) evolved from another early meaning, "morally pure, unblemished" (late 12c.). The sporting senses (fair ball, fair catch etc.) began in 1856. Fair play is from 1590s; fair and square is from c.1600. Fair-haired in the figurative sense of "darling, favorite" is from 1909. First record of fair-weather friends is from 1736.fair (n.) early 14c., from Anglo-Fr. feyre (late 13c.), from O.Fr. feire, from V.L. *feria "holiday, market fair," from L. feriae "religious festivals, holidays," related to festus "solemn, festive, joyous" (see feast).============================In the English commercial sense, it refers to honest weights and measures (no thumb on the scale) and honest exchanges of goods and services.So I agree with MsJS and Kevin. I also agree with QB and Scott to a point, that point being that it is inappropriate to argue that a tax system is "fair".Adam Smith argued that taxation should skip the poor because they could not afford it, and besides, so little could actually be collected from them. That is the sense of progressivity with which I agree. Thus I have argued for a substantial personal exemption for all with a flat rate above the exemption level. My wife the tax specialist says that would cut into her income, so I am arguing against my self – interest.
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Kevin:Income should correspond to effort?Income should correspond to value. Generally value is correlated to effort. But not always.BTW, why should the tax system be "fair", assuming we could even agree on a definition?Why should any law, or system of laws be "fair"? Why, for example, should we allow women to vote?
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Why is the EU having such debt problems when their tax rates are above 50%. Are they undertaxed? What would the tax rate have to be to support their welfare state to prevent such a massive debt?
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MsJS:The tax system can't be 'fair' for that exact reason, Kevin. The word means different things to different people.What does it mean to you? Does your understanding of "fair" render a progressive tax to be "fair"? How so?
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Mark:I also agree with QB and Scott to a point, that point being that it is inappropriate to argue that a tax system is "fair".I don't think it is any more inappropriate to argue that a give tax system is fair or unfair than to argue that any other law or system of laws is fair or unfair. I do think it is inappropriate to argue that a progressive income tax is fair, as it seems very obvious to me to be quite unfair. It discriminates against or in favor of certain citizens that would appall most of us if the favored/disfavored were defined in any way other than income.
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" I also agree with QB and Scott to a point, that point being that it is inappropriate to argue that a tax system is "fair"."I don't think I've said this. I don't think I would agree, but I'm not sure what it means. If fair means just, then I definitely disagree.
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qb:If fair means just…That is how I use and understand the word. They are synonyms.
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Scott: Does your understanding of "fair" render a progressive tax to be "fair"? How so?A progressive tax might be considered "fair", because those who can afford to pay more are obligated to share a greater percentage of the financial burden for government services. Those who can't afford much pay a lesser share of the burden. This could reasonably be considered "fair".
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The fair pricing of externalities is the primary reason that extractive and polluting industries require regulation.
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Scott: Why, for example, should we allow women to vote?I'm not sure we should. ;)Larger pool to draw from for collective wisdom? As a way of providing for a more representational government, allowing that, short of direct democracy, you can never have perfect representation?Given the length of time women could not vote, wouldn't it be more fair to count the vote of women twice?
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In some value systems 'fair' could in some way be correlated to ability to pay. But that could be called Communism. Or Christianity.
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"Fair" does not mean "just". In commercial law, fairness is a principle that justice may impose. QB, you argued that a progressive system of taxation is not "fair". I agree. But I agree because I think "fairness" is immaterial and irrelevant to any taxation system.So let us talk about "just". A "just" system of taxation is what Adam Smith had in mind. I gave the example. The power to tax, it has been said, is the power to destroy. Using taxation to destroy the taxpayer either selectively or generically would be "unjust". And it would kill geese that lay golden eggs, to boot. Thus exempting the poor while flat taxing the people who theortically can afford the tax is just, because the taxation is not destructive selectively or generically, unless the rate is "too high".
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yellojkt: The fair pricing of externalities is the primary reason that extractive and polluting industries require regulation.I would think the primary reason would be to obligate tiny minorities of folks from blithely doing things (potentially) that have broad negative impacts on everybody. Or, to require a "reasonable" level of recognized standards designed to ensure a reasonable level and expectation of safety by the general population. It's good to be able to anticipate that I won't suddenly find my house burnt to the ground, even a local robber-baron finds that it would be profitable to do so. ;)The fair pricing of externalities, though no doubt real, seems to me very difficult to do (what percentage of hurricane damage is due to industrial pollution in America?), and it would be true of all sorts of things, not just those that pollute.
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yello,I'm curious. Do you plan to bring the jacka** behavior and personal insults you have been dishing out at PL over here, too?Or maintain a totally different persona here? I'm trying to figure out what you are about.
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Mark: I agree. But I agree because I think "fairness" is immaterial and irrelevant to any taxation system.Second, btw. Some of my responses are iPhone, so I thought I ought to make my position clear. I don't think progressive taxation is fair (nor is a flat tax, actually), in any meaningful sense. People may have arbitrary, emotional senses of what constitutes an ideally fair system of taxation, and others may not. In my case, I don't think there is really an ideally "fair" taxation system, nor is that a requirement, anymore than there is an ideally "fair" recipe for bread dough. One might argue that a fair recipe for bread would involve equal amounts of flour, salt, and water, but this would result in remarkably poor bread, with no benefit to the bread, or consumers of said bread, for all the "fairness" of the recipe.
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I'm curious. Do you plan to bring the jacka** behavior and personal insults you have been dishing out at PL over here, too?Well, he hasn't, so far. I imagine he also periodically takes off all his clothes and lathers up with soap and water, but he hasn't actually done that here, so I'm okay with that, too. 😉 Not that I imagine that a lot or anything.
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The a priori assertion that only a flat tax can be fair invites unfairness. Who decides what the poverty level that doesn't get taxed is? It does not follow that a fair tax cannot be progressive. There are grades of poverty that would justify some additional levels of rate structure. The current system has all sorts of rules that tried to make things 'fairer' for widows which ended up placing a higher burden on families where income was split between two wage-earners rather than a since wage earner.Do large families merit a higher exemption than small families or single people? Even a simple system can get complicated in a hurry.
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Kevin:A progressive tax might be considered "fair", because those who can afford to pay more are obligated to share a greater percentage of the financial burden for government services. This is just a tautology. You might as well say that a progressive tax system might be considered fair because it is progressive. By what standard of justice is such a situation fair?
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I'm the one being called a jack-ass.
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yello: But that could be called Communism. Or Christianity.But, generally, one of those is considered good and the other bad, depending on who is doing the considering. So I'm not sure what the conflation of them does to the argument. I tend towards the pragmatic. Clearly, the Soviet Union demonstrated that Communism is something less than ideal. Most active Communist states indicate that Communism is deeply flawed. Communism may be in some important sense more "fair" than capitalism. If so, I think it's of more benefit to more people that "fairness" not be a single unitary yardstick as regards what makes for the best political system.
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The original precepts of Christianity were collectivist, so the conflation is valid. It was only later Gospel of Wealth style teachings that correlated wealth with virtue.
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"I'm the one being called a jack-ass."No, actually I called your behavior jacka** behavior. I'm just judgmental that way about people who waste their time lobbing pointless personal insults at me at the same time they are playing grown-up here. Weird.
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Mark:"Fair" does not mean "just"Yes it does. To quote the dictionary it means "free from bias, dishonesty, or injustice."In commercial law, fairness is…When I use words, I generally use them in their ordinary, dictionary definition sense, not as defined or understood by lawyers in a specialized area of law.
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yello:The a priori assertion that only a flat tax can be fairNo one has made such an assertion.
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qb,What gets said on the Plum Line, stays on the Plum Line. Wasn't that the point of this blog, to discuss things civilly? I would disagree with your characterization of my comments there as 'pointless personal insults', but this really isn't the forum for that.
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Scott: This is just a tautology. You might as well say that a progressive tax system might be considered fair because it is progressive. By what standard of justice is such a situation fair?Not sure how to answer that, because I don't agree it's a tautology, but off the top of my head I'm not sure how to best demonstrate that. A system that takes into account one's ability to contribute when taxing seems plausibly "fair", just as a system that means test for a socialized retirement system seems plausibly "fair". If we take fair to be synonymous with just, what do we argue is unjust about considering ability to pay and, say, dependent minors into consideration when levying tax burdens?
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So can a progressive tax be fair? And if not, why?
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Kevin:Communism may be in some important sense more "fair" than capitalism.No, it's not. Not in any important or unimportant sense.
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Yello,I don't think most people here even bother going over to PL any more, but you are fooling yourself if you think that you can take assinine pot shots at people there and pretend it's not part of this reality. A lot of people are pithier there, but there's pithy and then there's nasty personal comments for no other purpose.Let's leave it like this. I don't respect you, and I know you don't respect me. In fact, I know that you don't respect anyone who is conservative or Republican. You've made that clear. So I'll just leave your commentary for others to discuss with you.
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Mark:But I agree because I think "fairness" is immaterial and irrelevant to any taxation system.Is it immaterial and irrelevant to law in general? If not, why is immaterial and irrelevant to tax law, but not other law?
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yellojkt: That sounds likes your arguing for the establishment of a state religion! BTW, God clearly believes ability to pay is critical to tithing. When a couple tried to keep more than they needed for themselves, God struck them dead:Behold the story of Ananias and Sapphira!If there wasn't such an issue these days with the mixing of religion with the state, the IRS would probably have that particular act engraved on the edifice of every IRS building and office. 😉
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The one big talking point that always gets me in a dander is that 'true' communism would be a fairer system than capitalism. It isn't and it could never be. It divorces the rewards from the efforts.
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qb: I don't think most people here even bother going over to PL any more,Bingo.
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That sounds likes your arguing for the establishment of a state religion!Nothing could be further from the truth. You can arrive at a system of fairness and justice outside of a religious structure. It's pretty much what our country was based on.
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Scott: No, it's not. Not in any important or unimportant sense.So Communism, as a system, is entirely unfair. is it more or less equal, do you think? And does equality have any relationship to fairness, or justness?
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"When a couple tried to keep more than they needed for themselves, God struck them dead."If you read it carefully, it was for lying about their gift, not for failing to give everything. God: not as communist as you thought.
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Kevin:Not sure how to answer that, because I don't agree it's a tautology,Well, there a name for an income tax system in which "those who can afford to pay more are obligated to share a greater percentage of the financial burden for government services" and "those who can't afford much pay a lesser share of the burden.". It's called a progressive tax system. Hence if the reason that a progressive tax system is "fair" is that " those who can afford to pay more are obligated to share a greater percentage of the financial burden for government services" and "those who can't afford much pay a lesser share of the burden", then a progressive tax system is fair by definition. That is, it is a tautology.
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yello: So can a progressive tax be fair? And if not, why?Seems tough for such a thing to be perfectly fair, as there would never be general agreement among those levying taxes, or those being taxed, as to what should be considered in the shaping of the tax code, or the deciding of levels of progressivity. As such, it's difficult for it to be fair, except in the most abstract sense (i.e., almost everybody pays something, ergo, it's "fair"–or, nobody likes paying taxes, ergo, it's "fair"). Similarly, insurance isn't "fair", as some people collect more than they pay into the system, yet the goal is not to be fair, it's to expand risk pools to provide a buffer against certain unknown events, should they occur, even if they occur in a time-frame in which you could never hope to self-insure. But you could argue that insurance is "fair", because you get something somewhat like what you paid for. But this gets to why I don't like "fairness" as a yardstick–it has a wide variability in meaning.
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hi yello,"The original precepts of Christianity were collectivist…"Blessedly, no!{hin enkelte}
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ScottC: Is a flat tax fair?Because if a flat tax is fair, why is it fair? I would have to think about it more, but if I'm not mistaken, your rhetorical approach above could be used to make any explanation of why something was fair a tautology. Which, again, makes me think that "fairness" is a poor yardstick.
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tao9: "Blessedly, no!"Indeed, one should render unto Caesar that which was Caesar's. Not advocate for a welfare state. 😉
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qb: If you read it carefully, it was for lying about their gift, not for failing to give everything. God: not as communist as you thought.Still, it always seemed a bit harsh. And lots of people have lied without getting struck dead, so I think the lesson was: don't hoard your money, sinners!
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Kevin:So Communism, as a system, is entirely unfair.It may be, but what I said is that it is not more fair than capitalism.And does equality have any relationship to fairness, or justness?Certainly. That is a primary reason why progressive taxation is not fair. It does not treat people equally.
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Many religious orders are still collectivist. Particularly the ones which take vows of poverty. The key difference is that all the participants agree to relationship voluntarily.
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yello:So can a progressive tax be fair? And if not, why?No, because it does not treat all people equally before the law.
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Scott, the same dictionary source you cited suggests that:just1 [juhst] Show IPAadjective1.guided by truth, reason, justice, and fairness: We hope to be just in our understanding of such difficult situations.So I will repeat that one principle we look to in commercial law is honest dealing, or fairness. When you ask me if a law should be "fair" I answer that it should not discourage honest dealings. Even your example was one of conduct, btw, not a description of a statute. A statute is a means of control. A statute will have consequences. These consequences may prove unintended or intended. The statute itself is not "fair" or "unfair". It simply attempts to control some behavior.But I agree that a statute could be unjust. Morally bankrupt. Wrong. Unconstitutional. That could be true of a taxation statute. For me that would be true if a taxation statute were confiscatory and destructive, either to a person, a group of persons, or all persons. For example, if a property tax in my city called for a tax that exceeded the market annual rental value of the property, even if it applied to all property in the same proportions, I would argue the tax was confiscatory. I would argue it was unjust. I might throw in "unfair", but it has no real meaning here. "Unfair" adds nothing.
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It could be argued that a progressive tax treats people more equally than a flat tax, because it takes into considerations such things as real impact of lessened income. A small tax on someone with little income is much more punitive than a large tax on someone with a huge income. And a flat tax still charges the wealthy more in real cash, so only a flat rate is truly fair.
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I don't think the defense of progressive taxation is necessarily tautological, just as I don't think that its critique or a defense of flat taxation necessarily are. But like all moral or justicial arguments, some premises have to be established and examined, and as the Socratic dialogues show, definitions seem to be made to attack. First principles are hard to state.Rawls' famous notion is justice as fairness, which he set up as a thought experiment leading to egalitarian rules that he assumed everyone would accept in the absence of knowledge of their position in life. I remember that my first reaction to this was simply to scoff. How can you just assume that? Many smarter and infinitely deeper critiques have been lodged, but it remains that Rawls just assumed that people would agree on egalitarian rules. If, however, you define fairness or justice as correlating the tax burden to ability to pay, you can say that progressive taxation is "fair." You haven't necessarily stated a tautology, but you have stated a premise that is contestable.Flat taxers would tend to advocate an "equal treatment" principle of justice or fairness. The typical move of "the Left" at this point–speaking with gross generalization–is to move the baseline, or redefine the unit to be treated equally. The progressive taxer might thus say, we are treating everyone equally; all are subject to the same rules. It is just that the rules sort them by ability to pay. But the effect clearly is unequal treatment.
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Kevin:Because if a flat tax is fair, why is it fair?Because it treats people impartially and equally.
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qb:I don't think the defense of progressive taxation is necessarily tautologicalI don't either. I just think Kevin's particular defense is.
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"Still, it always seemed a bit harsh. And lots of people have lied without getting struck dead, so I think the lesson was: don't hoard your money, sinners!"A bit? Lots of people have hoarded their money, too, without being struck dead. It is one of those mysterious Bible stories, though, and one that could be played up by unscrupulous ministers.
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I've just realized that this post is about Assuming Economics and has now led into a discussion about assuming justice or fairness.Philosophers: assumers right up there with economists.
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All debates eventually devolve to definitions. The key ones here seem to be 'fair' versus 'equal'.
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qb: A bit? A tad. A jottle. A dab. ;)Scott: Because it treats people impartially and equally.A progressive tax does the same, just with more nuance. Arguably, it's more fair, because it takes more of "the facts on the ground" into account in determining fairness. Viola! My argument is complete, and is no longer tautological.
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Mark:Scott, the same dictionary source you cited suggests that…Color me baffled. The definition of "just" that you cite includes "fairness", yet you still want to insist that "just" does not mean "fair". I don't get it.The statute itself is not "fair" or "unfair". It simply attempts to control some behavior.If I said that the Don't Ask Don't Tell statute was unfair, I suspect that most people would understand perfectly what I meant, even if they disagreed with me. Perhaps you wouldn't find the assertion meaningful, but if so I think you would be a distinct minority. Perhaps even a minority of one."Unfair" adds nothingUnless, as I already said I do and as the dictionary indicates is perfectly reasonable, one assumes that "unfair" means the same thing as "unjust", in which case it adds exactly the same thing that "unjust" does."Unfair" adds nothing.Unless one understands "unfair" to mean the same as "unjust", as I do. Then it adds precisely the same thing that "unjust" adds.
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Kevin:A progressive tax does the sameNo it doesn't. The very purpose of a progressive tax is to treat high income earners differently than low income earners.
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"free from bias, dishonesty, or injustice.""guided by truth, reason, justice, and fairness"Scott, by your understanding of words, bias, dishonesty, and injustice have equivalent meanings, as do truth, reason, justice, and fairness.Clearly they are not equivalent words, in either case, or the dictionary would not have strung them out to make the point.Clearly, to this minority of one, anyway. Good night!
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Scott: The very purpose of a progressive tax is to treat high income earners differently than low income earners.For a more egalitarian outcome–or, arguably, an outcome that is more fair. A flat tax, by definition, deprives a person of low income of far more purchasing power that a much higher tax on someone who makes much, much, much more money. Ergo, a progressive tax can, at the very least, be more "fair" than a flat tax. If strictly equal treatment is the definition of fairness in taxation, then a flat dollar cost, rather than a flat percentage tax, is truly fair. Ergo, everybody should pay a flat $1000 to the government, and the government must simply make do out of that. That would seem the most perfectly fair system, in the abstract.
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Actually, a progressive tax does not treat lower earners differently. The first X amount of income is taxed exactly the same, regardless as to one's totally earnings. The next Y amount is taxed similarly. QB – I think you should sling personal insults elsewhere. I'm fully capable of a cutting insult, but choose to leave that particular tactic for elsewhere in the intertubes.BB
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BB at 9:38 PM wrote:"Actually, a progressive tax does not treat lower earners differently. The first X amount of income is taxed exactly the same, regardless as to one's totally earnings. The next Y amount is taxed similarly. "Agreed.If the structure is not confiscatory at any bracket it is probably not unjust.If it does not rise so steeply from one bracket to another that a reasonable person is sorely tempted to earn less, it is not self-defeating. If there are so many brackets that the imposition and collection of the tax is needlessly complex and costly that would be inefficient.But it is important to recall as BB has done that in our progressive tax structure the low earner is taxed the even as the highest earner on the high earner's first dollars of income.
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Kevin:For a more egalitarian outcome…What do you mean by "egalitarian outcome"? If you mean that more people end up in a more equal economic circumstance, then yes it is more egalitarian, but that doesn't make it just of fair. A 100% tax to be equally distributed amongst all would have a more egalitarian outcome. Would you consider that to be more fair or just tax?If strictly equal treatment is the definition of fairness in taxation, then a flat dollar cost, rather than a flat percentage tax, is truly fair.Yes, I agree. If the goods/services that a person A receives from the government are the same goods/services that person B receives from the government, there is no reason in justice or fairness that dictates that one should be forced to pay a different amount for those services than the other.
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FB/Mark:Actually, a progressive tax does not treat lower earners differently.Of course it does.There is no substantive difference between a law wich requires me to pay 25% on the "first" $10,000 I make but 50% on the "next" $10,000, and a law which requires me to pay 37.5% on the full $20,000. It is the effective rate, not the formula that determines the effective rate, that is relevant.Even the Warren Buffet/Elizabeth Warren argument about fairness is founded on the recognition that it is effective rates that are relevant, not the method or semantics of the law that determine the rate.Again, the clear effect (and intent) of a progressive income tax is to treat higher income people differently than lower income people. I really don't see how that can be sensibly denied.
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Again, the clear effect (and intent) of a progressive income tax is to treat higher income people differently than lower income people. I really don't see how that can be sensibly denied.Yes. And most people don't have a problem with that. Progressivity has been the hallmark of the tax system since its inception and why the constitution was amended to allow it. People recognized that direct capitation was 'unfair' and created an alternate system.The use of rates and brackets just is an easier way of implementing this in a logical manner. It keeps effective rates reasonable. Without them there are situations (such as taxing Social Security benefits above a certain income level) which can actually create ridiculously high marginal rates. When you start looking at what really happens at or near the levels where deductions start being disallowed or where the ATM kicks in, the effective rates are much higher than the actual published brackets.
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Mark:Scott, by your understanding of words, bias, dishonesty, and injustice have equivalent meanings, as do truth, reason, justice, and fairness.No, not at all. Saying that a given word can mean X, Y or Z does not at all lead me to conclude X, Y, and Z are equivalent. Certainly, however, I do think that "justice" and "fairness" can be and often are used as synonyms. I'm pretty sure that is what the author of the link that began this thread meant when he said that a change in the tax code would make it "more fair", and that is the understanding I've based my comments on.
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yello:Yes.I'm glad you agree.And most people don't have a problem with that.My sense of fairness or justice is not determined by what "most people" think. History is rife with examples of majorities not having a problem with things that are, to me anyway, manifestly unfair or unjust. So Idont find what "most people" think to be all that relevant to the question at hand.
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FB:I think you should sling personal insults elsewhere.I wonder how you might treat me here if, when you encountered me someplace outside of ATiM I targetted you with snark and gratuitous insults. At the very least, pointing out the discrepancy in behavior would be fair game, I think.
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QB – I think you should sling personal insults elsewhere. I'm fully capable of a cutting insult, but choose to leave that particular tactic for elsewhere in the intertubes.Thanks for your opinion. I choose not to indulge in a game of pretend. I don't consider ATiM a pretense.
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As an aside, can anyone name any other economic transaction, other than taxes, where "ability to pay" is considered before setting the price?
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And, I still believe this would be a good idea in general:Shouldn't taxpayers get a receipt?
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jnc:As an aside, can anyone name any other economic transaction, other than taxes, where "ability to pay" is considered before setting the price?Tuition at the College of the Holy Cross. I will not be sending my kids there.
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jnc:And, I still believe this would be a good idea in general:Me too.
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jnc4p: As an aside, can anyone name any other economic transaction, other than taxes, where "ability to pay" is considered before setting the price?B2B service transactions are often set like that, though it's not codified. I can tell you from having worked in design and marketing, projects were often set based on the clients perceived ability to pay. If you feel a big client can afford to pay a 10% or 20% or 40% premium (and perhaps may expect to), then you charge it. If it's a small customer, but you want the business, you set the price much lower. I've done the same in independent consulting. Of course, the folks getting charged the premium are still getting the value, it's just the folks who don't get charged a premium who are getting an excess in value, because I either have time I'd rather fill with business than not, or because I am predisposed to work at a discount for charitable or networking reasons. Movie stars are often thusly compensated. If people with big money are interested, the price goes way up. If folks with a little money are interested, but the talent is interested, the price can go way down.
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ScottC: A 100% tax to be equally distributed amongst all would have a more egalitarian outcome. Would you consider that to be more fair or just tax?It would certainly be a much flatter tax. If there is something inherently more fair about a a flat tax than a progressive tax, then, by your own logic, it would be a more fair or just tax. However, it fails Mark's test of back-breaking onerousness. Yes, I agree. If the goods/services that a person A receives from the government are the same goods/services that person B receives from the government, there is no reason in justice or fairness that dictates that one should be forced to pay a different amount for those services than the other.Which leads me to another question. What is more fair: a flat tax, or flat charge, where you have no say in how the tax revenues are spent (or very little, which is what representative democracy gives us), or a highly progressive tax where you get to say, with great granularity, exactly what your tax money should be spent on. So you may have to pay more as a percentage of income than someone of a lower socioeconomic scale, but you also get to say that most of your money goes to defense, or to NASA, or to the NEA or the EPA or . . . and, of course, you could divide it evenly (that would be the 1040EZ form). The most "fair" arrangement would make any money I spent on government voluntary, but the second most fair arrangement I can imagine would be one in which there was a mandatory charge, progressive or flat or fee, where I decided how the money was spent. There may be logistical problems with that, of course.
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Oy, I didn't realize this thread's still running.Scott, I answered your question from last evening on today's "morning report" thread.
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MsJS:I happen to agree that progressive taxation is appropriate, but that doesn't make it 'fair'.Thanks. That is a fair answer. 😉
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Kevin:If there is something inherently more fair about a a flat tax than a progressive tax, then, by your own logic, it would be a more fair or just tax.No. It simply would cease to be unfair/unjust in the way I have specified.. Just law is not defined solely by the equal applicability of it to everyone, although that is a requirement. What is more fair: a flat tax, or flat charge, where you have no say in how the tax revenues are spent (or very little, which is what representative democracy gives us), or a highly progressive tax where you get to say, with great granularity, exactly what your tax money should be spent on.Too many unknown variables to know for sure. But I would very much prefer a system in which I could direct my tax dollars at specific spending priorities of my choosing to the system we have now. The primary problem with this notion is its effect on debt. Creditors could have no confidence that debt would ever be repaid if taxpayers could individually, by virtue of their numbers, choose not to pay it.
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Creditors could have no confidence that debt would ever be repaid if taxpayers could individually, by virtue of their numbers, choose not to pay it.As I noted, there are some logistical problems. Credit-worthiness primary among them. Such granularity would end up with loopholes (well, we've got to service existing debt, well, we've got to pay for Washington to run, etc).
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"So can a progressive tax be fair? And if not, why?No, because it does not treat all people equally before the law."Nonsense.
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bsimon:Nonsense. What is nonsense?
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