Progressive taxation is not logical. It assume that not only should we tax the rich at the same rate as the poor and middle class, we should tax them at a HIGHER rate. And yet if they didn't the money, why did they bother to earn it? Taxing them at a higher rate can only give them a lower incentive for the most productive people in our society, who employ the most people.
And what do they do with their money? They INVEST it, usually back into their own business, but into the general economy as well.
Progressive taxation is taxation of capital. If you ask any economist, they will explain that taxing capital is eating your seed corn.
If you want to understand that progressive taxation is unfair, then give four pennies to one boy, and eight pennies to another. Then charge the first boy a penny for some candy, and the other boy three pennies. When he objects, and surely he will, tell him "but you have twice as much money." If he can do simple math and then says "But that's no fair! I should only be paying twice as much." You can then try explaining how under the theory of progressive taxation, it's no hardship for him to pay three times as much.
posted at: 04:00 | path: /economics | permanent link to this entry