CMV: Progressive taxation and equality before the law are contradictory beliefs

So when you tax earning a high income, you disincentivize high-earners

That's not backed up by facts.

You and I both face the same tax bracket if we earn the same amount of money. That's equality. Just because you earn more than me, and I don't make enough to reach the same tax bracket, doesn't mean that we're being treated differently.

When you tax cigarettes, it's done to disincentivize smoking. So when you tax earning a high income, you disincentivize high-earners.

A cigarette tax just drives up the cost of an item which would push some people to not purchase it. But people get a tangible return in income. Very few people are going to turn down $3million because $7million got taken out in taxes (just as an example, not trying to show accurate values here)

> Being a high-income earner in itself is not a crime, therefore, disproportionally levying taxes on this demographic is discriminatory.

Granted, it's discriminatory. Not all forms of discrimination are bad tho.

> When you tax cigarettes, it's done to disincentivize smoking. So when you tax earning a high income, you disincentivize high-earners.

Nope. Taxing cigarettes is done with the intent to disincentivize smoking. But taxing a high income at a higher rate is not done with the intent to disincentivize high-earners. Rather, it is done because they are more able to bear the burden of a higher tax rate than people with lower incomes.

> but does the state really need it too?

Um, you can't operate a government (in modern times) without money. I'm surprised you asked this question.

> Rich people can lose all their money in case of bad financial decisions, but the state can just violently levy taxes when it needs more money. They are the ones innovating and taking risks.

Nope. It is entrepreneurs who are innovating and taking risks. In general, most rich people are not particularly high risk takers, but rather invest their money in a diversified way to reduce overall risk.

I don't think you understand how progressive tax bracketing actually works, because you're arguing like somehow someone who gets a raise might actually earn less in taxes thus disincentivizing higher wages. That is NOT how progressive tax bracketing works. In a progressive tax bracketing system you CANNOT earn less than you did before when entering a new tax bracket.

A progressive tax system works by taxing the incomes within its bracket at a specific rate, not all the income.

Let's create a really simple example to demonstrate. My tax brackets will take 10% of $0-100, 20% of $101-250, and 30% of $251-500.

• If I make $100 in this system, I will pay $10 in taxes, thus earning a total of $90 after tax.
• If I make $250 in this system, I will pay $10 on the first $100 I earn, and 20% of the remaining $149 that exists in that bracket from 101-250, so an additional ~$30. My taxes are therefore $40, leaving me with a final earnings of $210. Note that I went up into the next tax bracket, but I still earned more money overall!.
• Lastly, to hammer this home, let's say I earn $450 after my next raise. I pay $10 on the first $100. I pay $30 on the next $149, and the $199 that remains in the last bracket I pay 30% on which is ~$60. Thus my taxes are $60+$30+$10, or $100. This means that after taxes, I am now earning $350. Again, note that I went up into another higher tax bracket, but I still earned more money overall!

It is a mathematical impossibility for anyone to earn less when they get a raise in a progressive tax bracketing system!

Thus this system is completely fair, because if I earn $50K a year, or if I earn $500K a year, my earnings in each bracket are all taxed exactly the same, and I still earn more money when I get bigger pay cheques. Everyone is treated equally.

. It doesn't seem fair, and it's not like the government worked those 70 hours or brilliantly designed that new product together with the rich person that's being taxed.

No but the government did ensure that that person's intellectual property is protected. It did ensure that that person had very little cause for concern of being murdered in their sleep that night. It did ensure that person had an education and that anyone who may have helped that wealthy person had an education. It ensured that the wealthy person had safe food and water. It ensured that they had roads for which to make it to and from the office. Etc etc etc. Government exists because it makes things better for all of us. I'd argue that government is MORE important to the wealthy in this country because of how much they tend to rely on corporate protections and an educated workforce. As such, it makes sense for everyone to contribute to this common goal. The sacrifice each person makes to the government should be weighed into this as well. A person in poverty paying 10% of their salary in taxes is making a much larger sacrifice than a wealthy person paying 30%.

​

Also, the tax system isn't discriminating against wealthy people; it discriminates against income. If that wealthy person wanted to reduce their income, they could enjoy the same low effective tax rate as anyone else.

Every system of taxation could reasonably be considered "unfair" by some group, via some reasonable metric. I don't think this nullifies the general principle of equality before the law. Equality before the law means it's the same law for everyone, not that individual circumstances aren't rightfully accounted for by the law.

When you tax cigarettes, it's done to disincentivize smoking. So when you tax earning a high income, you disincentivize high-earners.

This is absolute nonsense.

If I offer you a job with $50k pay and a 10% tax rate, or a job with $200k pay and a 50% tax rate, which job are you going to take?

Even in an extreme hypothetical like that, earning more is still incentivized.

(Also, why do we care whether getting rich is incentivized? Do we need people to desperately want to be rich?)

You could argue that rich people don't need that money as much as poor people, but does the state really need it too?

Yes, the state needs it to help poorer people.

Rich people can lose all their money in case of bad financial decisions

This virtually never happens. Rich people can even commit serious financial crimes and they don't even up losing all of their money. Once you're rich, you really have to be a pretty big idiot to lose everything.

They are the ones innovating and taking risks.

Are they? How "risky" is it to (for example) start a new company when you have a comfortable safety net of savings and investment income to fall back on when it fails?

Rich people take the "risks" of starting new, innovative companies more often because it isn't actually a risk for them. (And of course there's survivorship bias - poor people start innovative companies, too, but they'll fail at a much higher rate than rich people, since rich people can support the company from their personal funds, friends, investor networks, etc.).

it's not like the government worked those 70 hours or brilliantly designed that new product

Did the rich person actually design that new product, though? Or did he just pay a team of product designers to do that? (Hint: it's the latter).

As for working 70 hours, what does that have to do with how much money people deserve? Plenty of poor folks working 2-3 jobs at 80+ hours a week. That's who the government support goes to. Why do their long hours not matter but the rich guy's (much more comfortable, fancy office) long hours do?

So you have a very libertarian view of the Rule of Law. I think the main difference between you and those who want progressive taxes is that others want equality of law for people, while you want equality of law for individuals.

So what do I mean by that? A liberal would argue that progressive taxation does not violate the Rule of Law because if a poor person became rich, they too would have to pay more taxes. Therefore, you are treating every person the same, but each individual has different characteristics and assets which differentiate them within the eyes of the law.

As long as these properties aren't fundamental and unchangeable to a person (race, religion...etc) this isn't an issue. The government does this all the time in policies unrelated to taxes. Farmer subsidies, welfare policies, and marriage benefits would all technically be violations of Rule of Law by your definition.

What is equality before the law?

• Doesn't matter whether or not you commit a crime, everyone have to go to jail?

• Regardless of qualification, everyone can be a doctor and perform surgery?

• Not winning national election is not a crime, therefore, not giving everyone the full power of the president is discriminatory.

Equality before the law covers things like:

Thus, everyone must be treated equally under the law regardless of race, gender, national origin, color, ethnicity, religion, disability, or other characteristics https://en.wikipedia.org/wiki/Equality_before_the_law

Which one is more equal than the other, and why?

• Everyone have to pay the same $ amount

• Everyone have to pay the same % amount

• Everyone have to pay according to the same formula (progressive)

• People will have to follow a different formula, depending on (race, gender, national origin, color, ethnicity, religion, disability, or other characteristics)

Generally speaking, as long as the law does not take race, gender, national origin, color, ethnicity, religion, disability, or other characteristics into account, it is equal.

Provided everyone would face equal taxation given equal circumstances, there is no contradiction.

Why not go a step further? Why not have everyone pay exactly the same amount of money? If we're all equal, why don't we each owe, say, $5,000 in taxes, and it doesn't matter how much we earn? Isn't a flat tax discriminatory? The rich man has to pay astronomically more money than the poor man, correct? Isn't that unequal? Isn't that a disincentive to higher earnings?

Income is only one arbitrary metric for measuring how well off someone is and how heavily they are taxed.

For example, someone with a net worth of $100 million might make $10 million a year and pay $3 million in taxes. That's 30% of their income and 3% of their net worth.

Someone with an income of $50k/yr and the median net worth of $50k might pay $10k in taxes, which is 20% of their income and 20% of their net worth.

Now, which of the two is taxed more heavily?

What's the purpose of taxes? The maintenance of civilization and social order. Who has the most to lose if civilization were to crumble and everything were to turn into a lawless wasteland? Rich people.

A homeless person doesn't have that much to lose. Their life is horrible already - sure, it would be worse in a lawless wasteland, but not that much worse. Jeff Bezos, on the other hand, has an empire to lose if civilization were to go belly-up. Amazon can't exist in a Mad Max world.

He gains more out of and has more of a stake in the current social order existing and here's the important part - he loses progressively more if apocalypse were to happen.

A homeless person might lose, oh, let's call it 50% of his quality of life in a civilized vs. Mad Max world. Jeff Bezos will lose way more power and resources than a mere 50%. That's why it's reasonable to tax him progressively.

• Adam Smith, the father of capitalism stated: "it is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion", because a tax on "the luxuries and vanities of life [which] occasion the principal expense of the rich... would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable."

• Progressive taxation versus flat taxation inspires ongoing debate, and both have proponents and critics. In the United States, the historical favorite is the progressive tax. Progressive tax systems have tiered tax rates that charge higher income individuals higher percentages of their income and offer the lowest rates to those with the lowest incomes. Flat tax plans generally assign one tax rate to all taxpayers. No one pays more or less than anyone else under a flat tax system. Both of these systems may be considered "fair" in the sense that they are consistent and apply a rational approach to taxation. They differ, however, in their treatment of wealth, and each system may be called "unfair" according to who benefits or is treated differently.

• higher salaries enable affluent people to pay higher taxes and that this is the fairest system because it lessens the tax burden of the poor. Since the poor have the smallest disposable incomes and spend a higher proportion of their money on basic survival needs, such as housing, this system allows them to keep more of their money. Affluent taxpayers are better able to provide for their physical needs and therefore are charged more. A flat tax would ignore the differences between rich and poor taxpayers. Some argue that flat taxes are unfair for this reason.

• While a “flat tax” sounds inherently fair (everyone pays the same percentage!), I argue that a progressive tax system is actually the most fair and efficient way to fund the government.

• the government should fund its operations by extracting the least amount of “utility” from society. In economics, utility refers to “the degree of removed discomfort or perceived satisfaction that an individual receives from an economic act (buying, selling, or renting something).” This is a powerful concept that allows us to recognize that some dollars we spend are more ‘valuable’ than others. If we lined up our annual spending in order of importance (or highest utility). The first dollar we spend in a year would be on basic food, healthcare, or shelter, the $50,001th dollar we spend might go towards a flight to visit a family member, and the $1,000,001th dollar we earn is probably sitting in a savings account or put towards a second home. We should recognize that if we had to choose between buying a boat or putting food on the table, we’d obviously put food on the table. That’s the most efficient use of your money.

• I argue that we should break down personal income into four categories (but of course, the exact levels are subjective and up for debate):

• Survival Dollars ($0 — $30,000)- The bare minimum. Healthcare, housing, and food on the table. Extremely high utility.

• Happiness Dollars ($30,000 — $75,000) — Money that improves well being. You can take a vacation, go out to eat, and “live a little”. High utility.

• Extra Bucks ($75,000 — $500,000) — Mo’ Money Mo’ Problems. You can do more cool things, take longer vacations, and get a nicer car. This extra cash really doesn’t make you “happier”, but you earned it. Low utility.

• F You Money ($500,000+) — You got it hotshot. You’re making millions. Rapidly decreasing utility.

• Would the fairest tax system tax all of these categories equally? Of course not! That wouldn’t make any sense. If someone is earning just enough to scrape by, their tax dollars would either have to flow back to them in some kind of benefit or the taxpayer would have to go without their basic needs being met. Once you make enough money to take care of yourself, then you can start contributing to the greater good of society.....The more you make the more you are able to contribute without losing a huge amount of “utility” (or quality of life). A progressive tax is the most efficient way to fund a government because it does the least harm to its citizens.

• It is also indisputable that the alleviation of poverty was one of Smith’s central concerns, the common caricature notwithstanding. Even a cursory reading of The Wealth of Nations should make this point abundantly clear. Smith states, explicitly and repeatedly, that the true measure of a nation’s wealth is not the size of its king’s treasury or the holdings of an affluent few but rather the wages of “the laboring poor.” .....Smith declares that it is a matter of simple “equity” that “they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged.”

• When people worry about inequality today, they generally worry that it inhibits economic growth, prevents social mobility, impairs democracy, or runs afoul of some standard of fairness. Smith held, people sympathize more fully and readily with the rich than the poor: “the rich man glories in his riches, because … they naturally draw upon him the attention of the world,” while “the poor man goes out and comes in unheeded, and when in the midst of a crowd is in the same obscurity as if shut up in his own hovel.” ....Smith saw this distortion of people’s sympathies as having profound consequences: It undermines both morality and happiness. First, morality. Smith saw the widespread admiration of the rich as morally problematic because he did not believe that the rich in fact tend to be terribly admirable people. On the contrary, he portrayed the “superior stations” of society as suffused with “vice and folly,” “presumption and vanity,” “flattery and falsehood,” “proud ambition and ostentatious avidity.” In Smith’s view, the reason why the rich generally do not behave admirably is, ironically, that they are widely admired anyway (on account of their wealth). In other words, the rich are not somehow innately vicious people. Rather, their affluence puts them in a position in which they do not have to behave morally in order to earn the esteem of others, most of whom are dazzled and enchanted by their riches.

• Thus, it is precisely the presence of economic inequality, and the distortion of people’s sympathies that attends it, that allows—perhaps even encourages—the rich to spurn the most basic standards of moral conduct. Smith goes so far as to proclaim that the “disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition” is “the great and most universal cause of the corruption of our moral sentiments.”

• Why, then, do the vast majority of people spend the vast majority of their lives longing for and pursuing wealth? Smith saw it as obvious that people do not work so hard in order “to supply the necessities of nature”—that is, to obtain food, clothing, and shelter—because “the wages of the meanest laborer can afford them.” Rather, they want great wealth because of the attention it brings them: “It is the vanity, not the ease, or the pleasure, which interests us.” In other words, it is the fact that people sympathize more easily with the rich that leads them to want to become rich themselves, and to (wrongly) assume that the rich must be supremely happy. “When we consider the condition of the great, in those delusive colors in which the imagination is apt to paint it, it seems to be almost the abstract idea of a perfect and happy state,”

Being a high-income earner in itself is not a crime, ...

Isn't incarcerating criminals, but not incarcerating the innocent also an example of "inequality before the law?" It seems like this is a bit of a semantic game. When people talk about "inequality" in the context of social policy, they often mean something closer to the denotation of "injustice."

It's very tempting to engage in that kind of word play when it's so common: Whenever you hear rhetoric about one kind of "gap" or another people will be talking about "inequality" while pretending that it's "injustice." The thing is, it's rather disingenuous to engage in that kind of rhetoric if you've realized that it's specious at best.

This is done equally across the board. Everybody is subject to the same tax chart, and the same laws. Making people who earn less stay behind a line at the beach would be discriminatory.

You cannot believe in equality before the law and simultaneously levy taxes on a non-criminal demographic. Being a high-income earner in itself is not a crime, therefore, disproportionally levying taxes on this demographic is discriminatory.

Let's get away from the hypotheticals here and take a look at what you're actually saying. Both of these sentences frame taxation in a specific way. They say, taxation is a type of punishment. This is the fundamental assumption that people are disagreeing with in so many words.

As other posters have pointed out, taxation only reduces marginal income. Making more money will always result in having more money with any tax rate below 100%, and obviously there is no income bracket with anything close to a 100% tax rate.

Punishment aims to disincentivize or "pay back" some kind of harm done to another party. Taxes don't fit this definition at all. A raise in income is always a raise in income. It is still very much incentivized to make more money, and obviously people still try their hardest to do so. Making money doesn't harm society, so it doesn't fit the second definition either. Taxation is not punishment.

Finally let's look at equality under the law. The Universal Declaration of Human Rights defines this as the requirement that "everyone must be treated equally under the law regardless of race, gender, national origin, color, ethnicity, religion, disability, or other characteristics, without privilege, discrimination or bias." If I make $50,000 a year and I am a Black Buddhist woman, I pay a certain rate. If I make $50,000 a year and I am an Asian Pentecostal man, I pay the same rate.

Tax brackets have nothing to do with equality under the law because they have nothing to do with who you are as a person. "Rich" or "poor" are not static states of being. They are applied based on how much money you make in a given year, and that's it. I could be the son of an oil company CEO who makes millions of dollars a year, and pay no taxes because I don't have a job. Even though I am rich, I didn't make any money, so no taxes. I could be an engineer who became homeless and suddenly got a $100,000 a year job. Even though I am materially poor, I would pay the same taxes as any other person earning that high a salary. This is not discrimination based on who you are. It is simply measured by yearly income for that year, which could change at any time.

Equality before the law just means everyone is subject to the same laws and the same punishments, without regard for qualities like gender, race, or religion. Someone making $40000 a year is subject to the exact same tax bracket system someone making $20 million is, their income just doesn't reach the higher brackets where a higher tax percentage kicks in. The poor man could receive promotions, earn a higher wage, and be subject to those brackets, and the rich man could go bankrupt and be subject to the taxes associated with an average income.

A married man and a single woman pay different amounts of tax because of their marital status, are they unequal before the law?

A man with previous convictions is subject to harsher punishment for the same criminal act than a first offender, are they unequal before the law?

Sorry, u/Divvel – your submission has been removed for breaking Rule B:

You must personally hold the view and demonstrate that you are open to it changing. A post cannot be on behalf of others, playing devil's advocate, as any entity other than yourself, or 'soapboxing'. See the wiki page for more information.

If you would like to appeal, you must first read the list of soapboxing indicators and common mistakes in appeal, review our appeals process here, then [message the moderators by clicking this link](http://www.reddit.com/message/compose?to=%2Fr%2Fchangemyview&subject=Rule+B+Appeal+Divvel&message=Divvel+would+like+to+appeal+the+removal+of+[his/her+post](https://www.reddit.com/r/changemyview/comments/cb1de3/-/\)+because...) within one week of this notice being posted. Please note that multiple violations will lead to a ban, as explained in our moderation standards.

Equality under the law means that the law is the same for every person, not that it's the same for every circumstance. For example, property taxes only affect people who own property (excluding the indirect effect of property taxes being absorbed in the cost of rent). Sales taxes affect people differently based on how much they spend on taxable goods.