
Originally Posted by
icewendigo
...Also, I think that there are some interesting arguments for regressive taxes. In theory the services that the government provides to its citizens are of the same value to everyone. Why should one person have to pay ten times the taxes that another person pays when they are getting exactly the same services?
Some reasons for a progressive tax rate:
1 - Economists have noted that those of lower income spend more than those of higher income -- who tend to save more -- and this spending boosts the economy
2 - It reduces inequality, which is both inefficient and unfair. Inefficient because the more money a person has, the more likely he is to use it to improve his position in society at the expense of others, e.g., more influence on politicians, better legal standing in civil courts, more influence on the media, etc. Unfair, because those not born to wealth will have less of a chance of upward mobility the higher their taxes are.
3 - People actually don't get the same services, as those with more assets receive more police protection, more fire protection, better schools, a foreign/military policy that protects stock investments but not jobs, etc.
The justification for differential tax rates is based on the social contract concept that (ideally) allows the majority to determine what policy should be. (As opposed to a rule-based system like libertarianism or socialism where the public is unable to change the rules.)