Progressive Taxation: A Fair Distribution Aligning with Economic Logic and Social Responsibility

One might wonder, in the context of progressive taxation, why certain income brackets are taxed famous bank robber Willie Sutton, when asked why he robbed banks, famously replied, "because that's where the money is." This quip can indeed be translated into a thought-provoking question about progressive taxation. But in this context, it's the relative value of money and the priorities each income bracket has that justify progressive taxation.

Relative Value of Money

The value of money changes depending on how much one already has. Your first $10,000 is crucially valuable because it provides the essentials for survival, like housing and food. The next $10,000 is of immense value but less so than the first, covering transportation and your children's education. After that, every $10,000 increment becomes progressively less valuable. The final $10,000, if you have that much, is essentially play money, which can be used for discretionary spending. In the context of progressive tax, the objective is to tax the most valuable income the least, and the less essential (play money) the most. This approach stands on the principle that it is reasonable for someone with more substantial means to contribute more to the community.

Social Responsibility and Progressive Liberalism

My perspective as a progressive liberal might be viewed with suspicion by some US Americans, particularly those who frame divisive political ideologies. However, the idea that those who are more capable of supporting others should similarly support the community more is a sound and fair principle. This aligns with the broader concept of social responsibility, suggesting that the wealthiest individuals have a greater obligation to contribute to the well-being of the community.

Types of Taxes and Their Effectiveness

Not all taxes function in a progressive manner. It is worth noting that generally, only income taxes follow the principle of progressive taxation. Sales and excise taxes, on the other hand, are considered regressive, as they hit lower-income groups more heavily. It is crucial to consider the entirety of taxes paid by a particular income group when discussing the concept of a flat tax. Regressive taxes disproportionately affect lower-income individuals, leading to a flat tax burden for all, which is not equitable.

The Nature of Govt and Taxation

The concept of progressive taxation is inherently connected to the idea that the government is a service organization. The U.S. Constitution grants the government the right to levy taxes, but it does not prescribe differential taxation. The notion of a per-capita tax—that is, dividing the federal budget by the number of adults in the country—is a simpler, more equal approach to taxation. Each individual would pay the same amount, regardless of income, as a service fee for the government's services. This concept is rooted in the belief that each person should contribute equally to the services provided, eliminating the disparity in tax contributions based on income.

The Necessity of Progressive Taxation

Some argue that progressive taxation is a form of theft. However, the rationale behind progressive taxation is neither about envy nor about punishing success. The main argument is about fairness and the distribution of resources in a just society. Progressive taxation is about ensuring that those who can afford to contribute more do so, thus making the resources more evenly distributed and the society more equitable. In essence, it is an economic and social mechanism that aims to balance the burden of taxation across different income levels, promoting a more stable and just society.

Conclusion

Progressive taxation is a system that deserves scrutiny and support within sensible limits. Its principles are rooted in economic logic and social responsibility. By taxing the most essential income brackets more lightly and the discretionary income more heavily, this system aims to ensure that wealthier individuals contribute more to the community. This approach aligns with the overarching goals of fairness and equity, and it helps to build a more robust and resilient society.