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Why Taxing the Rich More Is Not Bad

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Yes, it is good . And it is fair. We should tax the rich more. However, it might seem fairer to tax everyone the same amount. Also, if ...

Yes, it is good. And it is fair. We should tax the rich more.

However, it might seem fairer to tax everyone the same amount. Also, if a person is particularly successful, it might seem fair that she should not be penalized for that by having to pay more taxes. This is the thinking behind the flat tax proposal. We can use it as an example to show how taxing can never be objectively fair and why it is not inherently unfair to tax the rich more. The concept of "fairness" is fluid because we, as a society, decide what it is, and as our society changes, so can that definition.

A flat tax will tax everyone, no matter how successful or not, at 15% (or some other number). The poor person will still pay less tax than a richer person because he makes less money. This poor person making $15,000 a year will only pay $2,250. A rich person making $150,000,000 will pay $22,550,000. One pays $2,250, and the other pays $22,550,000 in taxes. They are paying different tax amounts but they are both paying 15% of their income. Because a single person will struggle while making just $15,000 and can't afford to pay even 15% in taxes, the minimum income before taxes are deducted can be set at $30,000 (or some other number). This is proposed as a reasonable method for taxing.

It might seem fair at first, but the rich guy is still paying more money in taxes. Perhaps to be truly fair the rich guy should not pay more than the poor guy. To say that using a percentage is the benchmark of fairness is arbitrary. The argument assumes itself to fair. The argument ignores that the poor and rich are still paying different amounts of money. It sort of throws into the proposal that a single percentage for everyone is fair, then ignores if that really makes sense or not. In fact, this is no more fair than any other taxes system, including the one we have.

The true is that fairness is whatever we say it is. There is no objective way to define fairness.

So, what I am about to say may not be fair, but I will give a justification for taxing the rich more. In the example above the rich guy pays more taxes than the poor guy, even though they pay the same percentage of income. Well, the rich guy should pay more. I for one think it is only fair that he does, although this is only my opinion.

Here is my justification:

First, let me explain why private property is not what we often think it is. We think, at least in the United States, that private property is some kind of absolute ownership. If I buy a house and some land, I am the king of that land. It is mine to do as I please and no one better stop me. That's not totally true. There are limits. Of course, you do have certain rights with regards to that house and land. You have certain freedoms in how you use it. But those freedoms are not absolute. They are never absolute. There is no good reason they should be absolute either.

I will explain by starting with the Earth. Everything we have comes from the Earth. Even we come from the Earth. So, does anyone own the Earth? No, of course not. No one owns the Earth. Which is another way of saying, I think, that we all own the Earth, equally. Everyone in the society you live in, actually everyone in the world, owns your land. That may sound ridiculous, but in some sense, it is true.

The Earth is a big place, so we allow societies to form as country and manage an area of land. And those countries will parcel out their land to individuals so those individuals can put the land to use. How they do this depends on the type of government in the country. In a democracy where the people own the government (sort of in the same way a mutual fund is owned by the shareholders), the people can vote on how many rights land owners will possess.

The point of all that though is that the land owners, owners of materials that come from Earth, do not have absolute ownership of that land or materials. They have rights to it, with limits.

So, if you buy land, build a factory, bring in raw materials, hire people, and produce some product and make a lot of money, how much of the money should you be able to keep? The land and the raw materials belongs to everyone, we're only allowing you to use it, with limits. It's that lack of absolute ownership and those limits that are the reasons that make taxing the rich more than other people "fair."

Here's what I think is fair. The owner of that factory is producing something people want or else he would not be making money. He should make a profit and should make more than his employees; they depend on him after all. The question is how much more should that factory owner make. This is where it gets arbitrary. I think the factory owner should pay a much higher percentage in taxes than his employees. Not so much that he no longer will be rich, but still more. He deserves to be rich, but the society that makes his richness possible also deserves a share of the profits, which we call taxes.

No business can survive without the community and owes much to the community, even as the community owes much to the business.

More Questions:
  • If a small segment of businesses and individual make most of the money, who’s going to buy their product? Are they going to buy it from themselves?
  • How does greater taxing of the rich affect the economy?
  • If the rich are taxed more, do they suffer?
  • Will the poor and middle class benefit from the rich being taxed more?
  • Could it be, if the taxes go toward infrastructure and social stability, that businesses and the rich themselves will benefit if they are taxed more?
  • If the lower classes receive more benefits from the extra taxes put on the rich, will that increase the demand for the products produced by the rich?
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Consider This:
We don't pay taxes. Only the little people pay taxes. Leona Helmsley

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The Evolving Monkey : Why Taxing the Rich More Is Not Bad
Why Taxing the Rich More Is Not Bad
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