Tuesday, March 27, 2007

Horrors!

Evidently, a state governmental agency here in Minnesota has come up with a study that "proves" that taxes--state and local--here are slightly regressive, meaning that as one's income increases, the proportion that one pays in state and local taxes goes down as expressed as a percentage.

The saddest thing about this is that conservatives often implicitly accept the logic that regressive taxes are bad by arguing that the tax code is progressive when one includes federal taxation. The data hold, but the argument misses a vital point; there is nothing inherently unjust about a tax that happens to be regressive.

If you doubt this, look at a quick look of regressive taxes; gasoline, cigarettes, liquor, sales, property, and so on. Imagine, for example, what would happen if a repeal of the taxes on cigarettes and alcohol was proposed. Wouldn't it help the poor, who smoke and drink more than the rich, if these onerous taxes were repealed?

Of course not. We know that it's a bad thing to smoke or drink too much, and that supply and demand dictates that as costs rise, demand falls. Hence, dropping taxes on these items would actually hurt those it was designed to help.

So we know from experience that a just tax ought to be unintrusive (no tax collector needlessly going through your records), efficient, and it ought to promote intelligent economic decisions--working, saving, sobriety, etc..

In other words, the most unjust tax of all is one that is very intrusive, very expensive to collect, and promotes foolish economic decisions. It also happens to be the one progressive tax we have; the income tax.

2 comments:

Johnny Roosh said...

How come nobody talks about the flat tax any more?

Bike Bubba said...

Got me. I personally tend to favor consumption based taxes because of the issue of what behaviors are promoted or discouraged, but a flat tax would certainly be a big improvement over what we have.

And welcome here. New MOB-ster?